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Codelco CEO Diego Hernández Resigns

Codelco CEO Diego Hernández Resigns
May 25
09:01 2012

SANTIAGO — Diego Hernandez, the CEO of Codelco for the past two years, presented his resignation due to personal reasons amid the copper battle with Anglo American. The board of directors has assigned Thomas Keller, current CFO, as his successor.

Diego Hernandez assumed the responsibility of being the executive leader of Codelco in May 2010, after heading the base-metals division of BHP Billiton. Hernandez has a long history in the mining and natural resources market, having held many leading position in different international companies throughout his life. But now, because of personal reasons, he has resigned his position of CEO of the Chilean state-owned mining company Codelco, the largest copper producer in the world.

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Diego Hernández steps down from Codelco. Photo: Codelco

“Hernández’s resignation takes place after having carried out important decisions on company strategy, which is especially recognized by the Board of Directors,” indicated the company in a press release.

Thomas Keller, the current CFO of Codelco, is to become the new CEO of the company.

“Mr. Keller joined Codelco in 2010 and actively participation in the strategic reformulation of the company led by Diego Hernandez.  Among his main achievements is the organization of the financial plan to acquire Codelco’s stake in Anglo American Sur,” the press release stated.

The plan sparked controversy last year, and has seen Codelco and Anglo American in a war of words and court battles. The Sur property includes Los Bronces and El Soldado copper mines. Los Bronces has the potential to be one of the bigger copper mines in the world. It recently underwent a US$2.8 billion expansion to increase production.

Late last year, Codelco received finances to buy a 49 percent stake in the Anglo American Sur operations from Mitsui. The window opens in January, every three years. Only a couple of weeks later, however, Anglo American surprised the markets by announcing that they had sold 24.5 percent of their ownership to Japan’s Mitsubishi Corp for US$5.4 billion.

Although Hernández stated that his resignation is because of personal reasons, other sources indicate otherwise.

“It is worrying and disturbing that just this week Hernández resigns, when it was announced that Codelco could reach an extrajudicial agreement with Anglo American because of the dispute over the shares. I really don’t understand why and it opens itself up for assumptions,” said Deputy Marcos Espinosa.

After months of legal battles, which could possibly last up to five years, Anglo American and Codelco agreed to push back the judicial process for 30 days, in order for them to try negotiating. This decision was taken after the realization of the damages caused to both companies by the legal battle.

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Sandro Aravena Perez

Sandro is a Chilean national currently attending Kenyon College in Ohio, USA. He is a Modern Languages and Literature major (German/Italian). After growing up in Chile, he moved to Italy in 2008 to finish his last two years of high school at the United World College of the Adriatic. In January 2013 he will move to Germany for a semester to continue his German studies. For as much as he loves travelling and the world, to him there is no better place than Chile.

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