Codelco Struggles with 25-Year Low Copper Output
Chile’s state-owned mining giant, Codelco, continues to struggle with copper production, which remains at its lowest point in the past quarter-century, straining an already tight global market.
According to Reuters, the demand for copper is increasing due to the rise of electric vehicles and green energy initiatives.
Despite being the world’s leading copper producer, Codelco is falling short of its 2024 production targets. Analysts warn that the company faces significant hurdles in recovering its production levels in the second half of the year.
The production slump has been attributed to delays at critical mines, accidents, and management errors, which have worsened the global copper shortage and drove prices to record highs earlier this year. Production setbacks included a fatal accident at the Radomiro Tomic mine and delays in the start-up of the Rajo Inca project. Máximo Pacheco, chairman of Codelco’s Board of Directors, disclosed that production had decreased year-on-year in the first half of 2024. Long-term issues have also impacted major operations at the Chuquicamata and El Teniente mines.
“We anticipate that Codelco’s copper output will be lower than in 2023, and reversing this trend in 2024 will be challenging,” said Juan Carlos Guajardo, head of the local mining consultancy Plusmining. “Codelco might attempt to advance some production from 2025 to boost this year’s figures, but the outlook for 2024 remains bleak.”
Chile, the leading copper producer globally, with Codelco at the forefront, is facing increased financial pressure and is also navigating a new directive to support state initiatives for lithium production. Efforts to improve cooper production include launching the Rajo Inca project to extend the life of the Salvador unit and initiating partial operations at the expanded El Teniente underground mine. Additionally, Codelco is restructuring its management, as it aims to reach annual copper production of 1.7 million tonnes by the end of the decade while spearheading domestic lithium development efforts.
Despite the challenges, Pacheco dismissed the possibility of revising Codelco’s production forecast, which stands at 1.352 million tonnes, slightly above the 1.325 million tonnes produced in 2023, according to Reuters.
