Codelco rules out meeting copper goals as it faces tough year

Codelco Chairman Bernardo Fontaine said the Chilean state copper behemoth faces another difficult year for production, effectively ruling out a longstanding goal of returning to pre-pandemic output levels by the end of the decade.

Under previous administrations, Codelco was consistently too optimistic on its production targets, with project setbacks eroding performance, Fontaine said in an interview with Radio Infinita. 

“For seven years, Codelco hasn’t met its projections — and this year is no exception,” he said Tuesday. “It will be a difficult year for production.”

There is “no possibility” of reaching a previous target of 1.7 million tons within four or five years, he said, adding that management is now focused instead on presenting a more realistic assessment of the business. In March, Codelco delivered a 2026 production guidance range of 1.331 million to 1.357 million tons. 

Codelco’s misfiring efforts to overhaul its aging operations reflect broader struggles in the global mining industry as deposits get harder and pricier to find, develop and exploit. The supply side’s inability to keep pace with demand growth is a key reason why copper is trading near record highs. If Codelco can’t improve its performance, it risks missing out on soaring consumption of copper for data centers and electric vehicles. 

Fontaine, who took over as chairman in May, said Codelco would unveil a recovery plan around October or November centered on improving profitability rather than maximizing output. The company has suspended approvals for new projects while it reviews its capital spending plans to ensure they generate acceptable returns.

He said Codelco also plans to seek more partnerships with private companies to develop mining assets, saying the company lacks the capital and capacity to advance its entire portfolio on its own. Fontaine said all options remain under review for Codelco’s 49% stake in the El Abra mine, including diluting its holding.

Fontaine also defended the company’s financial position despite debt of more than $20 billion, while arguing Codelco’s main challenge is operational rather than financial. He blamed years of disappointing production, rising costs and underperforming investments for a sharp decline in contributions to the Chilean state, despite higher copper prices.

(By James Attwood)