Obligation Codealco 3% ( USP3143NBE33 ) en USD

Société émettrice Codealco
Prix sur le marché refresh price now   94.69 %  ▲ 
Pays  Chili
Code ISIN  USP3143NBE33 ( en USD )
Coupon 3% par an ( paiement semestriel )
Echéance 29/09/2029



Prospectus brochure de l'obligation Codelco USP3143NBE33 en USD 3%, échéance 29/09/2029


Montant Minimal /
Montant de l'émission /
Cusip P3143NBE3
Prochain Coupon 30/03/2026 ( Dans 49 jours )
Description détaillée Codelco est la plus grande entreprise productrice de cuivre au monde, une société publique chilienne exploitant des mines de cuivre à grande échelle.

Une obligation, identifiée par le code ISIN USP3143NBE33 et le code CUSIP P3143NBE3, a été émise par Codelco, la Corporación Nacional del Cobre de Chile, une entreprise minière d'État reconnue mondialement comme le plus grand producteur de cuivre, dont les opérations sont d'une importance économique stratégique majeure pour le Chili. Cette émission, originaire du Chili, est actuellement cotée sur le marché à un prix de 91,64% de sa valeur nominale. Libellée en dollars américains (USD), elle offre un taux d'intérêt nominal de 3% et arrivera à maturité le 29 septembre 2029, avec des paiements d'intérêts effectués à une fréquence bisannuelle.







OFFERING MEMORANDUM
U.S.$2,000,000,000
Corporación Nacional del Cobre de Chile
U.S.$1,100,000,000 3.000% Notes due 2029
U.S.$900,000,000 3.700% Notes due 2050
The notes due 2029 (the "2029 notes") will bear interest at the rate of 3.000% per year and will mature on September
30, 2029, and the notes due 2050 (the "2050 notes") will bear interest at the rate of 3.700% per year and will mature
on January 30, 2050. We refer to the 2029 notes and the 2050 notes, collectively, as the "notes" and, separately, as a
"series of notes." The interest will be payable semi-annually in arrears on March 30 and September 30 of each year,
beginning on March 30, 2020, in respect of the 2029 notes, and on January 30 and July 30 of each year, beginning on
January 30, 2020, in respect of the 2050 notes.
We may redeem the notes at our option, in whole or in part, at any time and from time to time prior to the date that is
three months, in respect of the 2029 notes, and six months, in respect of the 2050 notes, prior to the maturity date of
the 2029 notes and the 2050 notes, respectively, at a redemption price equal to the greater of 100% of the outstanding
principal amount of the notes to be redeemed and a redemption price based on a "make-whole" premium, plus accrued
and unpaid interest to the date of redemption. In addition, we may redeem the notes at our option, in whole or in part,
at any time and from time to time, beginning on the date that is three months, in respect of the 2029 notes, and six
months, in respect of the 2050 notes, prior to the maturity date of the 2029 notes and the 2050 notes, respectively, at
a redemption price equal to 100% of the outstanding principal amount of the notes to be redeemed, plus accrued and
unpaid interest to the date of redemption. Upon the occurrence of specified events relating to Chilean tax law, we may
redeem the notes in whole, but not in part, at 100% of their principal amount, plus accrued and unpaid interest to the
date of redemption. See "Description of Notes--Tax Redemption" and "--Optional Redemption"
The notes constitute direct, general, unconditional, unsecured and unsubordinated obligations of Corporación Nacional
del Cobre de Chile ("CODELCO" or the "Company"). The notes rank without any preference among themselves and
equally with all other unsubordinated and unsecured obligations of CODELCO, other than certain obligations granted
preferential treatment pursuant to Chilean law. It is understood that this provision will not be construed so as to require
CODELCO to make payments under the notes ratably with payments being made under any other obligations. See
"Description of Notes--Ranking."
Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and for trading on
the Euro MTF market of the Luxembourg Stock Exchange. This Offering Memorandum constitutes a "prospectus"
for purposes of Part IV of the Luxembourg law on prospectus for securities dated July 16, 2019.
See "Risk Factors" beginning on page 15 for a discussion of certain risks that you should consider in connection
with an investment in the notes.
Neither the U.S. Securities and Exchange Commission (the "SEC") nor any other regulatory body has approved
or disapproved of these securities or passed upon the adequacy or accuracy of this offering memorandum. Any
representation to the contrary is a criminal offense.


The notes have not been registered under the United States Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws, and are being offered and sold only to (i) qualified institutional buyers under Rule 144A
under the Securities Act and (ii) persons outside the United States under Regulation S under the Securities Act. For a
description of certain restrictions on the transfer of the notes, see "Transfer Restrictions" and "Plan of Distribution."
The notes are being offered pursuant to an exemption from the requirement to publish a prospectus under Regulation
(EU) 2017/1129 (as amended and supplemented from time to time, the "Prospectus Regulation"), of the European
Union, and this offering memorandum has not been approved by a competent authority within the meaning of the
Prospectus Regulation. The notes are not intended to be offered, sold, or otherwise made available to and should not
be offered, sold, or otherwise made available to any retail investor in the European Economic Area.
We have launched a cash tender offer for (a) any and all (the "Any and All Offer") of our outstanding (i)
U.S.$402,186,000 aggregate principal amount of 3.750% Notes due 2020 (the "2020 Notes") and (ii)
U.S.$236,960,000 aggregate principal amount of 3.875% Notes due 2021 (the "2021 Notes" and, together with the
2020 Notes, the "Any and All Notes") and (b) up to U.S.$639,146,000 aggregate principal amount, less the aggregate
principal amount of the Any and All Notes validly tendered and accepted for purchase in the Any and All Tender
Offer (the "Maximum Tender Offer" and, together with the Any and All Offer, the "Tender Offers") of (i) the 3.000%
Notes due 2022 (the "2022 Notes"), (ii) the 4.500% Notes due 2023 (the "2023 Notes") and (iii) the 4.500% Notes
due 2025 (the "2025 Notes" and, together with the 2022 Notes and 2023 Notes and the Any and All Notes, the "Tender
Notes"), in each case, validly tendered and accepted by us on or before the expiration date of the applicable Tender
Offer. We intend to use the net proceeds from the sale of the notes (i) to pay the consideration for the Tender Offers
and accrued and unpaid interest on the Tender Notes, (ii) to pay fees and expenses incurred in connection with the
Tender Offers and (iii) the remainder, if any, for general corporate purposes. The Tender Offers are not being made
pursuant to this offering memorandum. The closing of the Tender Offers is contingent upon the closing of this offering.
Issue price per 2029 note: 99.846% plus accrued interest, if any, from September 30, 2019.
Issue price per 2050 note: 99.786% plus accrued interest, if any, from September 30, 2019.
Delivery of the notes was made in book-entry form only through the facilities of The Depository Trust Company
("DTC") and its direct and indirect participants, including Euroclear Bank S.A./N.V. ("Euroclear"), as operator of the
Euroclear system, and Clearstream Banking, S.A., Luxembourg ("Clearstream") on September 30, 2019.
Joint Book-Running Managers
BofA Merrill Lynch
HSBC
J.P. Morgan
Scotiabank
The date of this offering memorandum is October 3, 2019.


We have not, and the initial purchasers have not, authorized anyone to provide any information other
than that contained in this offering memorandum. We and the initial purchasers take no responsibility for,
and can provide no assurance as to the reliability of, any other information that others may give you. We are
not, and the initial purchasers are not, making an offer of these securities in any jurisdiction where the offer is
not permitted.
Prospective investors should not assume that the information contained in this offering
memorandum is accurate as of any date other than the date on the front of this offering memorandum.
After having made all reasonable inquiries, we confirm that (i) the information contained in this offering
memorandum is true and accurate in all material respects, (ii) the opinions and intentions expressed herein are honestly
held and (iii) there are no other facts the omission of which would make this offering memorandum as a whole, or any
of such information or the expression of any such opinions or intentions, misleading.
CODELCO accepts
responsibility accordingly.
Unless otherwise indicated or the context otherwise requires, all references in this offering memorandum to
"CODELCO," the "Company," "we," "our," "ours," "us" or similar terms refer to Corporación Nacional del Cobre
de Chile (CODELCO) together with its subsidiaries.
TABLE OF CONTENTS
Page
Note Regarding Forward-Looking Statements .............................................................................................................iv
Enforceability of Civil Liabilities..................................................................................................................................v
Presentation of Financial and Statistical Information ...................................................................................................vi
Summary........................................................................................................................................................................1
Risk Factors .................................................................................................................................................................15
Use of Proceeds ...........................................................................................................................................................28
Capitalization...............................................................................................................................................................29
Exchange Rates ...........................................................................................................................................................31
Selected Consolidated Financial Data .........................................................................................................................32
Selected Operating Data ..............................................................................................................................................36
Management's Discussion and Analysis of Financial Condition and Results of Operations ......................................38
Business and Properties ...............................................................................................................................................63
Overview of the Copper Market ..................................................................................................................................89
Regulatory Framework ................................................................................................................................................92
Management ................................................................................................................................................................98
Related Party Transactions ........................................................................................................................................102
Foreign Investment and Exchange Controls in Chile ................................................................................................104
Description of Notes..................................................................................................................................................105
Taxation.....................................................................................................................................................................118
Plan of Distribution ...................................................................................................................................................122
Transfer Restrictions..................................................................................................................................................128
Validity of the Notes..................................................................................................................................................131
Independent Auditors ................................................................................................................................................132
Glossary of Certain Mining Terms ............................................................................................................................133
General Information ..................................................................................................................................................137
Index to Financial Statements ............................................................................................................................................F-1
The notes may not be offered or sold, directly or indirectly, in the Republic of Chile ("Chile") or to any
resident of Chile, except as permitted by applicable Chilean law.
This offering memorandum has been prepared by CODELCO solely for use in connection with the proposed
offering of the securities described herein. This offering memorandum does not constitute an offer to any other person
i


or to the public generally to subscribe for, or otherwise acquire, securities. We and the initial purchasers reserve the
right to reject for any reason any offer to purchase any of the notes.
This offering memorandum may only be used for the purposes of this offering.
The initial purchasers make no representation or warranty, express or implied, as to the accuracy or
completeness of the information contained in this offering memorandum. Nothing contained in this offering
memorandum is, or shall be relied upon as, a promise or representation by the initial purchasers as to the past or future.
CODELCO has furnished the information contained in this offering memorandum.
In making an investment decision, prospective investors must rely on their own examination of CODELCO
and the terms of the offering, including the merits and risks involved. Prospective investors should not construe
anything in this offering memorandum as legal, business or tax advice. Each prospective investor should consult its
own advisors as needed to make its investment decision and to determine whether it is legally permitted to purchase
the securities under applicable legal investment or similar laws or regulations. Investors should be aware that they
may be required to bear the financial risks of this investment for an indefinite period of time.
This offering memorandum contains summaries believed to be accurate with respect to certain documents,
but reference is made to the actual documents for complete information. All such summaries are qualified in their
entirety by such reference. Copies of documents referred to herein will be made available to prospective investors (i)
upon request to CODELCO or the initial purchasers and (ii) at the office of the Luxembourg paying agent.
IN CONNECTION WITH THIS OFFERING, BOFA SECURITIES, INC., HSBC SECURITIES
(USA) INC., J.P. MORGAN SECURITIES LLC, SCOTIA CAPITAL (USA) INC., OR ANY PERSON
ACTING FOR ANY OF THEM, MAY OVER-ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO
SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH
MIGHT OTHERWISE PREVAIL FOR A LIMITED PERIOD AFTER THE ISSUE DATE. HOWEVER,
THERE IS NO OBLIGATION FOR BOFA SECURITIES, INC., HSBC SECURITIES (USA) INC., J.P.
MORGAN SECURITIES LLC, SCOTIA CAPITAL (USA) INC., OR ANY PERSON ACTING FOR ANY OF
THEM, TO DO THIS. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME, AND MUST BE BROUGHT TO AN END AFTER A LIMITED PERIOD.
You must: (i) comply with all applicable laws and regulations in force in any jurisdiction in connection with
the possession or distribution of this offering memorandum and the purchase, offer or sale of the notes; and (ii) obtain
any consent, approval or permission required to be obtained by you for the purchase, offer or sale by you of the notes
under the laws and regulations applicable to you in force in any jurisdiction to which you are subject or in which you
make such purchases, offers or sales; neither we nor the initial purchasers shall have any responsibility therefor.
The notes are subject to restrictions on resale and transfer as described under "Transfer Restrictions." By
purchasing the notes, you will be deemed to have made certain acknowledgments, representations and agreements as
described under "Transfer Restrictions." You may be required to bear the financial risks of investing in the notes for
an indefinite period of time.
You acknowledge that:
·
you have been afforded an opportunity to request from us, and to review, all additional information
considered by you to be necessary to verify the accuracy of, or to supplement, the information contained in
this offering memorandum;
·
you have not relied on the initial purchasers or any person affiliated with the initial purchasers in connection
with your investigation of the accuracy of such information or your investment decision;
·
you have made your own assessment concerning the relevant tax, legal, currency and other considerations
relevant to investment in the notes;
ii


·
you have sufficient knowledge and experience to be capable of evaluating the merits and risks of a
prospective investment in the notes; and
·
no person has been authorized to give any information or to make any representation concerning us or the
notes, other than as contained in this offering memorandum and, if given or made, any such other information
or representation should not be relied upon as having been authorized by us or the initial purchasers.
This offering memorandum is only being distributed to and is only directed at: (i) persons who are outside
the United Kingdom (the "UK"); (ii) investment professionals falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (iii) high net worth entities, and other
persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as "relevant persons"). Any notes will only be available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire such notes will be engaged in only with, relevant persons. Any
person who is not a relevant person should not act or rely on this offering memorandum or any of its contents.
The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold
or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a
retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of
MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance Mediation
Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of
MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation. No key information document
required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling packaged
retail and insurance based investment products or otherwise making them available to retail investors in the EEA has
been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPs Regulation.
See "Risk Factors" beginning on page 15 for a description of certain risks you should consider before
investing in the notes.
iii


NOTE REGARDING FORWARD-LOOKING STATEMENTS
This offering memorandum contains forward-looking statements. We may from time to time make
forward-looking statements in (i) our annual report; (ii) prospectuses, press releases and other written materials; or
(iii) oral statements made by our officers, directors or employees to analysts, institutional investors, representatives of
the media and others. Examples of these forward-looking statements include:
·
projections of revenues, profit (loss), capital expenditures, dividends, capital structure or other financial
items or ratios;
·
statements of our plans, objectives or goals, including those relating to anticipated trends, competition,
regulation and rates;
·
statements about our future economic performance or that of Chile or other countries in which we have
investments; and
·
statements of assumptions underlying these statements.
Words such as "believe," "could," "may," "will," "anticipate," "plan," "expect," "intend," "target,"
"estimate," "project," "potential," "guideline," "should" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying these statements.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of
important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and
intentions expressed in these forward-looking statements. These factors, some of which are discussed under "Risk
Factors," include economic and political conditions and government policies in Chile or elsewhere, inflation rates,
exchange rates, regulatory developments and changes in Chilean law, customer demand, competition, unanticipated
mining and production problems, commodity prices, relations with employees and contractors, variances in ore grade,
adverse weather conditions and natural disasters. We caution you that the foregoing list of factors is not exclusive
and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking
statements.
You are cautioned not to place undue reliance on these forward-looking statements which reflect our views
only as of the date they are made, and we do not undertake any obligation to update them or publicly to release the
result of any revisions to these forward-looking statements in light of new information or future developments after
the date of this offering memorandum.
iv


ENFORCEABILITY OF CIVIL LIABILITIES
CODELCO is a state-owned enterprise organized under the laws of Chile. All of its directors and executive
officers and certain experts named in this offering memorandum reside outside the United States (principally in Chile),
and all or a substantial portion of the assets of CODELCO and of such persons are located outside the United States.
As a result, it may not be possible for investors to effect service of process within the United States on, or bring actions
or enforce foreign judgments against, CODELCO or such persons in U.S. courts. In addition, CODELCO has been
advised by its Chilean counsel, Carey y Cía. Ltda., that no treaty exists between the United States and Chile for the
reciprocal enforcement of foreign judgments. There is also doubt as to the enforceability in Chilean courts of
judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of U.S. federal securities
laws. Chilean courts, however, have enforced judgments rendered in the United States by virtue of the legal principles
of reciprocity and comity, subject to the review in Chile of the U.S. judgment in order to ascertain whether certain
basic principles of due process and public policy have been respected, without reviewing the merits of the subject
matter of the case. Lastly, CODELCO has been advised by Carey y Cía. Ltda. that there is doubt as to the
enforceability in original actions in Chilean courts of liabilities predicated solely upon U.S. federal securities laws.
The notes, the indenture and the purchase agreement will provide that CODELCO will appoint the
Chilean consul in New York City as its agent upon whom process may be served in any action arising out of or based
upon, respectively, the notes, the indenture, the purchase agreement or the transactions contemplated thereby, which
may be instituted in any federal or state court having "subject matter" jurisdiction. See "Description of Notes."
Pursuant to the Chilean Mining Code, mining concessions as well as certain raw materials and other property
or assets permanently dedicated to the exploration or extraction of minerals cannot be subject to an order of attachment,
except with respect to mortgages, in the case that the debtor consents to the attachment in the same enforcement
proceeding or when the debtor is a stock corporation. In addition, pursuant to the Chilean constitution (the
"Constitution"), mining concessions corresponding to mining deposits exploited by CODELCO upon its creation in
1976 cannot be subject to attachment nor to any act of disposition by CODELCO. As a result, the rights of holders to
attach property of CODELCO in the event of a default under the notes would be limited by such provisions. See
"Regulatory Framework--Mining Regulations."
v


PRESENTATION OF FINANCIAL AND STATISTICAL INFORMATION
In this offering memorandum, references to "U.S.$," "$," "U.S. dollars" and "dollars" are to United States
dollars and references to "cents" are to United States cents (U.S.$0.01). References to "pesos" or "Ch$" are to Chilean
pesos and references to "UF" are to "Unidades de Fomento." References to "AUD" are to Australian dollars. The UF
is an inflation-indexed Chilean monetary unit that is linked to, and adjusted daily to reflect changes in, the Chilean
consumer price index during the preceding 30 days. References to "euro" or "" are to the legal currency of the
European Economic and Monetary Union.
Pursuant to Circular No. 368 (Oficio Circular No. 368) of October 2006, as amended, of the Comisión para
el Mercado Financiero (the Chilean securities authority, or "CMF"), since 2010, all companies with publicly traded
securities in Chile have been required to prepare and report consolidated financial statements in accordance with
International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board
("IASB").
The audited consolidated financial statements as of and for the years ended December 31, 2016 and 2017 and
the audited consolidated financial statements as of and for the years ended December 31, 2017 and 2018 included
herein are referred to as the "2016-2017 Consolidated Financial Statements" and the "2017-2018 Consolidated
Financial Statements," respectively. The 2016-2017 Consolidated Financial Statements and the 2017-2018
Consolidated Financial Statements (together, the "Audited Annual Consolidated Financial Statements") are presented
in accordance with IFRS issued by the IASB.
The unaudited interim consolidated financial statements as of June 30, 2019 and for the six-month periods
ended June 30, 2018 and 2019 included herein (the "Unaudited Interim Consolidated Financial Statements") are
presented in accordance with IAS 34 "Interim Financial Reporting." The Unaudited Interim Consolidated Financial
Statements and the Audited Annual Consolidated Financial Statements are referred to together as the "Consolidated
Financial Statements."
The accounting policies adopted in the preparation of the Unaudited Interim Consolidated Financial
Statements are consistent with those applied in the preparation of the 2017-2018 Consolidated Financial Statements,
except for the adoption of the new leases standard IFRS 16 as of January 1, 2019. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--New Accounting Standards."
Unless otherwise indicated, the Consolidated Financial Statements and other financial information
concerning CODELCO included herein are presented in U.S. dollars in conformity with Decree Law 1,350 of 1976,
as amended by Law 20,392 published in the Diario Oficial de la República de Chile (the "Official Gazette") on
November 14, 2009, and for periods after January, 1, 2009, in accordance with IFRS. Decree Law 1,350 is the Chilean
law pursuant to which CODELCO was created and which provides for its governance.
Because the notes offered hereby have not been and will not be registered with the SEC, this offering
memorandum does not and is not required to comply with the applicable requirements of the Securities Act, and the
related rules and regulations adopted by the SEC, which would apply if the notes offered hereby were being registered
with the SEC.
The U.S. dollar is the currency used in the primary economic environment in which CODELCO operates.
Nevertheless, as an international company operating primarily in Chile, as well as in several other Latin American
countries, several European countries and China, a portion of CODELCO's business is transacted in Chilean pesos
and other non-dollar currencies.
The body of generally accepted accounting principles is commonly referred to as "GAAP." A non-GAAP
financial measure is generally defined by the SEC as one that purports to measure historical or future financial
performance, financial position or cash flows but: (i) excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in
accordance with GAAP in the issuer's statement of income, balance sheet or statement of cash flows (or equivalent
statements); or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated and presented.
vi


In this offering memorandum, CODELCO discloses several non-GAAP financial measures, including
"Adjusted EBIT," "Adjusted EBITDA," "cash cost," "total costs and expenses" and "financial debt." Adjusted EBIT
is calculated by adding finance cost, impairment charges and income tax expense to profit (loss) for the period.
Adjusted EBITDA is calculated by adding finance cost, income tax expense, depreciation and amortization of assets
plus export taxes and impairment charges to profit (loss) for the period. Impairment charges includes charges and
reversals of charges of investment projects, research projects and investment in associates and joint ventures. Cash
cost is calculated in accordance with the methodology specified by Brook Hunt & Associates for the determination of
C1 cost (cash cost) and includes all direct cash costs of mining, including costs associated with extraction, leaching,
smelting and further processing of copper ores into refined metal, as well as labor, electricity, diesel, finance costs,
third-party services, other costs, transportation and physical plant costs associated with those processes, net of income
from sales of byproducts. Cash cost is presented as a nominal dollar amount, usually expressed as cents per pound,
and excludes provisions, amortization, depreciation and central office costs. Total costs and expenses is calculated by
adding the costs of sales of CODELCO's own copper plus the finance costs, less finance income, plus other expenses,
excluding expenses corresponding to a special export tax required under Law No. 13,196 (the "Copper Reserve Law"),
less other income by function. Financial debt is calculated as loans from financial institutions plus bonds issued. Total
debt to capitalization includes total financial debt divided by total financial debt plus total equity.
Adjusted EBIT and Adjusted EBITDA data are included in this offering memorandum because such data are
used by investors to assess: (i) the operating trends and financial performance of the Company and (ii) the ability of
the Company to (a) service its existing debt, (b) incur new debt and (c) fund its capital expenditures.
CODELCO believes that Adjusted EBIT and Adjusted EBITDA, while providing useful information, should
not be considered in isolation or as a substitute for profit for the period as an indicator of operating performance or as
an alternative to cash flow as a measure of liquidity. Adjusted EBIT and Adjusted EBITDA are not measures of
financial performance in accordance with IFRS. Additionally, CODELCO's calculation of Adjusted EBIT and
Adjusted EBITDA may differ from the calculation used by other companies and, therefore, comparability may be
affected.
Cash cost is disclosed in this offering memorandum because it is a widely used measure of costs in the mining
industry. CODELCO believes that cash cost, while providing useful information, should not be considered in isolation
or as a substitute for cost of sales, cost of selling and administrative expenses or as an indicator of costs. Cash cost is
not a measure of financial performance in accordance with IFRS.
CODELCO also presents certain ratios and margins that are derived using Adjusted EBITDA, including the
ratio of debt to Adjusted EBITDA, the Adjusted EBITDA coverage ratio and earnings to fixed charges (adjusted).
CODELCO believes that these ratios are widely used by investors to measure our performance. In the section titled
"Summary Consolidated Financial Data," CODELCO provides a reconciliation of Adjusted EBIT and Adjusted
EBITDA to profit, along with the ratio of debt to Adjusted EBITDA, Adjusted EBITDA coverage ratios and ratio of
earnings to fixed charges (adjusted), for the relevant periods.
Under the accounting policies adopted by CODELCO, gross profit is calculated before the provision for a
10% special export tax. Under the Copper Reserve Law, CODELCO is required to pay a special export tax on the
sales revenues that CODELCO derives from the export of copper sourced and related byproducts produced by
CODELCO. In addition, CODELCO is subject to a mining tax at progressive rates of between 5% and 14% in
accordance with Law No. 20,026. These taxes are included in "other expenses" by function. See "Summary--Recent
Developments--Repeal of the Copper Reserve Law" and "Risk Factors--Risks Relating to CODELCO's Relationship
with the Government of Chile--CODELCO is subject to special taxes" for additional information on these special
taxes, including the mining tax rate effective for 2017 and 2018.
Certain figures included in this offering memorandum and in the Consolidated Financial Statements have
been rounded for ease of presentation. Percentage figures included in this offering memorandum have in some cases
been calculated on the basis of such figures prior to rounding. For this reason, certain percentage amounts in this
offering memorandum may vary from those obtained by performing the same calculations using the figures in the
Consolidated Financial Statements. Certain other amounts that appear in this offering memorandum may not sum due
to rounding.
vii


The Observed Exchange Rate (as defined herein under "Exchange Rates") reported by the Central Bank of
Chile (i) as of January 2, 2018 was Ch$614.75 = U.S.$1.00; (ii) as of July 3, 2018 was Ch$651.21 = U.S.$1.00; (iii)
as of January 2, 2019 was Ch$694.77 = U.S.$1.00; and (iv) as of July 1, 2019 was Ch$679.15 = U.S.$1.00. The
Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos. See "Exchange Rates."
In this offering memorandum, all tonnage information is expressed in metric tons and all references to ounces
are to troy ounces, in each case, unless otherwise specified. Except where otherwise noted, tonnage information in
this offering memorandum does not include: (i) CODELCO's 49% direct share of the El Abra deposit, which is mined
by Sociedad Contractual Minera El Abra and 51% owned by Cyprus El Abra Corporation, a subsidiary of Freeport-
McMoRan Inc., or (ii) CODELCO's 20% indirect share of Anglo American Sur S.A. ("Anglo American Sur"), unless
otherwise specified.
See "Business and Properties--Copper Production--Associations, Joint Ventures and
Partnerships--SCM El Abra" and "--Anglo American Sur" for a description of these interests. Certain terms relating
to the copper mining business are defined in "Glossary of Certain Mining Terms."
Market information regarding CODELCO's share of copper production, reserves and relative cost position
has been derived by CODELCO from third-party sources, including reports from Brook Hunt & Associates, and from
CODELCO's own industry research. Brook Hunt & Associates publishes periodic reports containing global copper
production data and cost analysis by mine site. While CODELCO believes that its estimates are reliable, such
estimates have not been confirmed by independent sources. The Consolidated Financial Statements do not reflect the
value of CODELCO's mining concessions or its resources and reserves.
As used in this offering memorandum, "Chuquicamata," "Radomiro Tomic," "Gabriela Mistral,"
"El Teniente," "Andina," "Salvador," "Mina Ministro Hales" and "Ventanas" refer to divisions of CODELCO, not
the mines having those names, unless otherwise required by context.
As used in this offering memorandum, the term "billion" means one thousand million (1,000,000,000).
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