By Fabian Cambero

SANTIAGO (Reuters) – Copper output at Chile state mining giant Codelco is still slumping after hitting a 25-year low last year, squeezing an already tight global market for the red metal that is in growing demand for electric vehicles and the green energy revolution.

After years of sliding production at the world’s top producer, Codelco is behind target for production in 2024, and analysts say it faces an uphill battle to make up lost ground with a second-half turnaround.

Delays at key mines, accidents and management missteps were behind much of last year’s slump that exacerbated a worldwide copper shortfall that pumped up global prices to a record high earlier this year.

“We think that Codelco’s copper production this year will be lower than in 2023 and that the trend up until now will be difficult to reverse in the remainder of 2024,” said Juan Carlos Guajardo, head of local mining consultancy Plusmining.

“Perhaps Codelco will try to bring forward some flows from 2025 to improve this year’s numbers, but even so the production situation in 2024 does not look good.”

Chile is the world’s dominant copper producer ahead of Peru and the Democratic Republic of the Congo, and Codelco is the Andean country’s top single producer of the metal. It also faces rising debts and has been juggling a new mandate to drive Chile’s state push into battery metal lithium.

In a written response to questions from Reuters, Codelco said that while production had fallen in the first half of the 2024 from a year earlier, it aimed to “slightly exceed” last year’s output in the second half.

“We are working so output begins a long-term growth trend from 2024,” the firm said, adding it had boosted “intensive” monitoring of operations and targeted improvements at key mines.

A fatal accident at the Radomiro Tomic mine this year and delays to the start-up of the Rajo Inca project have hit output, which dropped year-on-year in the first half of 2024, chairman Máximo Pacheco revealed in a recent event. Longer-term issues have hit the major Chuquicamata and El Teniente mines.

Pacheco ruled out adjusting Codelco’s production forecast, now at 1.352 million metric tons, an internal document seen by Reuters showed, just above the 1.325 million tons in 2023.


César Pérez-Novoa, an analyst at BTG Pactual, noted that there had been some recent recovery in monthly production, but this needed to accelerate for Codelco to hit targets, which would depend on “higher operating rates and better ore grades.”

“This may be feasible, but at the same time there is no margin for error,” he said.

Codelco is launching its Rajo Inca project to extend the life of its small Salvador unit later this year, and starting partial operations at an expansion of its El Teniente underground mine. Codelco has also shaken up management as it tries to get back to annual copper production of 1.7 million tons by the end of the decade while also leading local development of lithium.

Gustavo Lagos, professor in the mining department of the Catholic University in Santiago, doubted Codelco would be able to reverse the long output decline.

“Production in the second semester is going to be higher than the production of the second half of 2023, but I don’t know if the (annual) production of 2024 is going to be higher than that of 2023,” he said.

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