Chile’s state-owned mining giant, Codelco, is facing its lowest copper production levels in the past quarter-century, adding strain to an already tight global market. As the world’s leading copper producer, Codelco’s shortfall is significant, especially as demand for copper surges due to the rise of electric vehicles and green energy initiatives.
Despite its leading position, Codelco is falling short of its 2024 production targets. Analysts warn that the company faces significant challenges in recovering its production levels in the second half of the year. Production setbacks have been attributed to delays at critical mines, accidents, and management errors, exacerbating the global copper shortage and driving prices to record highs earlier this year.
Notable production issues 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.
Juan Carlos Guajardo, head of the local mining consultancy Plusmining, stated, “We anticipate that Codelco’s copper output will be lower than in 2023, and reversing this trend in 2024 will be challenging. Codelco might attempt to advance some production from 2025 to boost this year’s figures, but the outlook for 2024 remains bleak.”
Chile, as the leading global copper producer, faces increased financial pressure while navigating a new directive to support state initiatives for lithium production. Efforts to improve copper 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, aiming to reach annual copper production of 1.7 million tonnes by the end of the decade while also 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. 
