Codelco CEO leaves as copper giant faces lithium role, output slump

Andre Sougarret, the engineer who led the rescue of 33 trapped miners in Chile more than a decade ago. (Image courtesy of Codelco.)

Chile’s state-owned Codelco said its chief executive, André Sougarret, is stepping down after less than a year in the role, as the world’s largest copper miner grapples with declining production and its new role in the country’s lithium industry.

Sougarret, an engineer who gained prominence when leading the rescue of 33 miners trapped in a northern mine in 2010, will remain in his post until August 31, Codelco said in the statement.

The 58-year-old cited difficulties in reconciling the demands of running the giant miner with those of his personal life, but said he would stay while the company seeks a replacement.

Sougarret took over for Octavio Araneda, who spent 36 years at Codelco in August last year. At the time, Araneda said he was leaving due to health reasons. Shortly after, however, he joined private Chilean miner Antofagasta (LON: ANTO) as director of operations.

Sougarret began his career at Codelco in the El Teniente Division in 1993. In 2012, he joined Antofagasta Minerals as general manager of Esperanza and, later, of Centinela.

He also held the role vice president at the National Mining Company (Enami), before leaving for Mexico as director of operations of Minera Fresnillo. 

The mining professional returned to Codelco at the end of 2020 to take over as vice president of Northern operations until he was appointed executive president last year.

The copper giant said in a separate statement it would stick to its strategy and operations, in a bid to reassure markets following Sougarret’s sudden resignation.

The board and executives added that Codelco’s strategy would keep the organization “mobilized around a common purpose” regardless of leadership changes. 

Production at 25-year low

Codelco’s copper production has fallen this year more than 11% to a 25-year low, despite investing about $3.5 billion a year to revamp its aging mines. 

The state-miner has recently been charged with the role of representing the Chilean government in new public-private contracts to mine lithium.

Critics have said that Codelco does not have enough knowledge and expertise in the lithium industry as it does of copper. Its chairman Máximo Pacheco disagrees and has said what matters the most is Codelco’s track record in mining as well as its international reputation, financial capacity and experience with private sector partners.

“We would be an extraordinarily short-sighted company if we don’t enter the lithium business,” Pacheco told a local newspaper last week.

Chile, the world’s top copper-producing country and no. 2 for lithium, has seen policy shifts this year, with President Gabriel Boric hiking royalties for mining companies and announcing plans for more state control over the lithium sector.