Codelco sees recovery in copper output with a 17% hike by end of decade

Codelco chairman Maximo Pacheco. (Image: Máximo Pacheco, via Wikimedia Commons)

Chilean state-owned copper giant Codelco aims to boost its annual production at least 17% by the end of decade amid “extraordinarily strong” demand for the metal key to the green energy transition, Chairman Maximo Pacheco told Reuters.

The company, which is the world’s largest producer of copper used to make wiring, electronics and many consumer products, has had to contend with declining ore grades in recent years and other operational challenges that Pacheco is now trying to tackle amid a surge in global demand.

“We need to strengthen project management because we have a plate full of structural projects worth billions of dollars, but not for a year or two,” Pacheco said in an interview on Wednesday on the sidelines of the World Copper Conference in Santiago, the copper industry’s largest gathering since 2019.

“We envision a decade where our investment will reach these levels, and probably more.”

The company seeks to counteract a drop in ore grades with “structural projects” and maintain production levels, which fell in 2022to 1.45 million tonnes and are expected to drop again in 2023.

Pacheco hopes Codelco will recover this decade by overcoming operational obstacles and improving getting new initiatives off the ground.

“We hope to reach a level of 1.7 million tonnes before the end of the decade,” Pacheco said. Codelco’s production last touched those levels in 2021.

After a successful bond placement at the beginning of the year of $900 million to help finance projects, Pacheco said there’s no interest in returning to the debt markets in the near future.

“What we do know is that we have a very good liquidity position, we have the cash resources to calmly finance our operations,” Pacheco said.

Future synergies

After Chilean officials earlier this week approved the expansion of Anglo American Plc’s Los Bronces Integrado mine – a project in which Codelco is a minority shareholder – Codelco said it expects future synergies and collaboration.

“We have a collaborative and cooperative relationship in logistics, transport and mining development,” Pacheco said. “But we have a huge opportunity to improve, expand and strengthen that.”

Los Bronces plans to use desalinated water to compensate for a severe drought that has plagued the country for over a decade, hurting copper production. But Pacheco said Andina was not planning on replicating the same model of underground exploitation tunnels, that are planned at Los Bronces, for future expansion.

Pacheco also said that the updated expansion plan for the underground El Teniente copper mine would be ready by the end of the year.

After a troubled 2022, including a fault at a pit wall at the Ministro Hales mine and a dome collapse in Chuquicamata, Pacheco said he expected the company to have “normalized” operations by July.

“I hope we won’t have another year with so many incidents and bad news in terms of operations like in 2022,” Pacheco said.

(By Fabian Cambero and Alexander Villegas; Editing by Ernest Scheyder and Marguerita Choy)


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