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Chilean copper miner Codelco preparing local bond issue -agency

SANTIAGO, May 25 (Reuters) - Chile's state-run Codelco, one of the world's biggest copper producers, is readying a domestic bond issue that will allow it to refinance its debt and fund investments, a local ratings agency said on Thursday.

Codelco was in the process of registering a new debt issue worth some $1.6 billion, denominated in Chilean inflation-adjusted currency unit UF, said Feller Rate in a statement, adding that it was rating the bonds 'AAA'.

The company, which returns its profits to the state and is funded by a mix of government refinancing and debt, needs to invest billions of dollars in an ambitious program to expand its tapped-out mines.

Codelco confirmed that it was registering the new bonds, but added that an issue was not necessarily imminent. (Reporting by Fabian Cambero, Writing by Rosalba O'Brien; Editing by David Gregorio)