Codelco on course for US$1.5bn treasury contribution in 2024

Although Chilean state copper giant Codelco's production in the first nine months was down from the same period in 2023, output in Q3 inched up nearly 2% year-on-year to 338,000t.

In January-September, the Ebitda of the world's leading copper producer rose 24% year-on-year to US$4.02bn and the goal of contributing around US$1.5bn to the treasury this year remains intact, Codelco said in its latest results report.

The red metal’s price has brought some relief to Codelco, which has seen a steady decline in output in recent years. “Copper has not fallen below US$9,000/t, remaining at a level of US$4/lb, which is favorable considering that the average operating costs in Chilean mines are low,” Erik Heimlich, principal commodities analyst for consultancy CRU, told BNamericas.

Copper will also remain key to the global energy transition, and when comparing the slow pace of project development with the growth in demand, “the price should be higher in the short to medium term, or at least remain stable,” Heimlich predicts.

In the first nine months of the year, Codelco produced 918,000t of copper compared with 966,000t in the same period last year, impacted by the postponement of the start of production at Rajo Inca.

The initiative was scheduled to begin operations in the first half of 2024 but progress was 87.7% as of September, delaying the recovery of the Salvador division after its underground operation ended last year due to depletion.

The open-pit Rajo Inca is designed to extract the remaining resources of the Indio Muerto deposit at the division in Atacama region but its complexity and the non-compliance of a contractor delayed the start of processing until the end of this year.

Codelco's Q3 production was also affected by the shutdown of operations at the Radomiro Tomic division in Antofagasta region for more than a month due to a fatal accident in March.

Investment and other projects

This year Codelco plans to invest more than US$4.5bn in its projects, which include:

- El Teniente division, O'Higgins region: The Andesite level at the underground mine is 57.6% complete and production is expected to start in the coming months. Andes Norte is 75.7% complete and mineral extraction is expected to begin in the first quarter of 2025.

- Chuquicamata division, Antofagasta region: The first phase of the level 1 infrastructure of the underground mine reached 67.2% progress.

- Andina division, Valparaíso region: Andina transfer is continuing the ramp-up of the second crushing line since April of this year.

- Desalination plant, Antofagasta region: Still under construction with the aim of supplying northern operations starting in 2026 with initial capacity of 840l/s.

This year, excluding its stakes in El Abra and Anglo American Sur, Codelco expects to produce 1.32-1.35Mt of copper compared with 1.32Mt last year, which was down 8.4% from 2022.

Last year, the company contributed US$1.43bn to the treasury and posted Ebitda of US$4.18bn. Codelco aims to gradually increase its production to 1.7Mt by the end of the decade, it said earlier this year.