The sale of Chilean state copper producer Codelco’s 40% stake in compatriot electricity company Edelnor could increase power prices and the company’s operational costs in the medium term, Codelco’s supervisors union federation (FESUC) president Fernando Ahumada said in a release.

The government is evaluating the potential sale, finance minister Felipe Larraín said in an interview with paper El Mercurio. The deal would be one of the government’s measures to fund reconstruction following the massive earthquake and subsequent tsunami that hit central and southern Chile on February 27.

“We have expressed our opposition to measures like this. Reconstruction needs Codelco’s support now more than ever. We are pleased that the finance minister said Codelco will remain 100% public, but that should include all the company’s assets, even those in other industry sectors which have a direct impact on copper production, such as power generation,” Ahumada said.

European energy group GDF Suez controls a 52% stake in Edelnor, while minority shareholders hold the remainder. One of the group’s subsidiaries, Electroandina, supplies power to the Codelco Norte Division through a 15-year contract.

Chile’s new government led by entrepreneur Sebastián Piñera is also considering selling the 10% stake that state minerals company Enami holds in the Quebrada Blanca copper mine in northern region I, something that has previously been rejected due to the constant income it provides, according to press reports.

Canadian miner Teck (TSX: TCK) owns 76.5% of Quebrada Blanca, with the remaining 13.5% in the hands of Chile’s Inversiones Mineras. Cathode production reached a record 87,400t in 2009. Teck is currently working on a prefeasibility study for a US$600mn expansion project that aims to increase production to some 170,000t/y in concentrates. A full feasibility study is expected for later this year.

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