(Bloomberg) -- Nelson Pizarro wants to remain at the helm of the world’s biggest copper company until he can cut the ribbon on a project to convert its flagship pit into a giant underground mine.

He’s been in mining for most of his 77 years, with the last four spent guiding state-owned Codelco through a painful downturn. With a change of government in Chile this year and a return to profitability thanks in part to Pizarro’s cost and spending cuts, speculation has been rife on how long he’ll stay.

Being there to see the first metal produced at the Chuquicamata underground project would be a “mission accomplished,” he said in an interview in Santiago. "But that depends on me, my health and my family. I have the determination to be there until that date."

That date is mid-2019, according to the company’s latest estimate.

Chuquicamata represents Codelco’s plight and its transition under Pizarro.

The century-old operation is the biggest open-pit in the world -- by physical size if not by production. Chuquicamata was once Codelco’s crown jewel and a symbol of Chile’s mining might. But it’s running out of profitable ore and has to switch to a modern underground operation.

About 60 percent complete, Chuquicamata underground will be the first of Codelco’s current batch of major projects to come into production. Still, the investment will only keep output at current levels of about 330,000 metric tons a year.

The new mine will need 1,700 fewer workers, partly because conveyor belts will replace trucks. Its smelter is also going through a $1 billion upgrade to meet tougher emissions standards.

"This is hard for Chuquicamata’s culture because it was always the flagship," Pizarro said. "But that’s history now. Either we do the transformation or there’s no more Chuquicamata."

Relations between Codelco and its unions at the mine soured in the past few months as the company revealed cost-cutting plans. In April, union leaders accused the company of having an "arrogant attitude" and threatened to strike. Pizarro says "the time of mourning has passed" and Codelco is talking to its unions on a daily basis.

Nicknamed "scissor-hands," Pizarro has overseen a 15 percent decline in production costs since he become CEO in 2014 and the focus remains on controlling costs even as copper prices recover to near four-year highs.

Pizarro’s other focus has been streamlining a record pipeline of projects as the company battles to maintain output levels after decades of under-investment. Codelco is now budgeting $21 billion through 2022. The main projects include:

  • Teniente Nuevo Nivel Mina, which is 46 percent complete
    • After review, now expected to start operating 2023-2024
  • Andina expansion, 53 percent complete
    • Expected to start 2021
    • Second expansion may take output to 140,000 tons from 88,000
  • Salvador Inca pit
    • Would take production to more than 80,000 tons from 60,000 tons

(Updates with additional project background in 12th paragraph.)

To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillanlombr@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Steven Frank

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