SANTIAGO - Chile's Codelco, the world's largest copper producer, will focus on more public-private partnerships to buoy finances and improve its capacity to develop new projects amid efforts to boost production, CFO Alejandro Sanhueza told Reuters on Wednesday.

A growing global appetite for copper and lithium amid the energy transition has led to sky-rocketing demand at a time when Codelco has been struggling to lift production after hitting quarter-century lows in 2023, partly due to dropping ore grades and delays in projects to overhaul key mines.

The CFO's comments are the strongest to date that the state-run company will focus on private backing to boost growth.

Sanhueza said public-private partnerships will be a "pillar of growth" and are not intended for the overhaul projects or any existing operations so as to comply with the company's nationalization regulations that do not allow it to accept private money in its mines.

"Greenfield initiatives (new projects) are a key part of our growth strategy and an opportunity to continue partnerships with third parties," Sanhueza said in a written response to Reuters, adding that it will also help diversify risk.

"Our exploration partnerships allow us to attract external financing and (production) capacity, enabling us to accelerate value generation with additional resources beyond those available to Codelco."

Aside from recent lithium joint ventures, Codelco reached agreements with Rio Tinto and BHP to prospect new potential copper mines, which sources with knowledge of the matter have described as promising.

Codelco already has a partnership in the El Abra mine with Freeport McMoRan and also owns a fifth of Anglo American Sur. This year, it also acquired a 10% stake in the Quebrada Blanca deposit from the small state-owned company Enami.

Sanhueza said another goal is to build joint infrastructure, facilitate access to new technology, or minimize environmental impacts.

Codelco announced an unprecedented agreement earlier this year to jointly operate neighboring copper mines with Anglo American that the company said would increase production by 120 000 metric tons per year for 21 years. According to sources, the company is seeking to finalize the agreement by September.

The company is also strengthening its own exploration budget Sanhueza said, which increased to an average of $83-million annually in 2023 and 2024 and will grow to an average of $150 million annually during the 2025-2029 period.

"Codelco has a significant stock of mining resources, which is a privilege in the industry," Sanhueza said. "This collaboration with third parties allows us to make better use of these resources, which are complementary to our own projects."