Reuters reported that Chile's state copper giant Codelco plans to spend USD 127 million on mining exploration in 2012 to 2013 as it seeks to offset dwindling ore grades to maintain its standing as the world's top producer of the red metal.

The miner said that the investment plan for exploration of Greenfield and brownfield projects in Chile, Brazil and Ecuador marks a 112 percent jump from 2010 to 2011's earmarked USD 60 million.

Codelco said that the current scenario of high copper prices is favorable to intensely developing exploration. The company's future chiefly resides in 4 productive deposits that allow it to operate for at least 50 more years. But only a third of its resources have the quality of reserves, grades have fallen sharply and present major challenges."

The state miner has several key projects to boost its output to over 2.1 million tonnes by 2020 including over USD 2 billion to transform Chuquicamata, the world's biggest open-pit mine, into an underground operation.

Codelco, which owns around 11% of the world's copper reserves, mined over 1.7 million tonnes of the red metal in 2011 but has been battling labor strife, extreme weather and ageing mines.

It has in the last few years focused on seeking large deposits, but as the odds of major discoveries become scarcer and long term projections for copper prices remain high, its strategy has shifted to be more open to smaller sized projects.

Mr Isaac Aranguiz VP of development said that "If we can demonstrate medium- and even small-sized prospects can have economic value for Codelco, we're open to exploiting them in association with third parties, be they national or international."

(Sourced from Reuters)