Codelco's copper output on the mend as El Teniente moves forward

Chilean state copper miner Codelco produced nearly 300,000t of copper in January-March and is advancing to begin production at the new Andesita and Andes Norte underground levels at the El Teniente mine, in O'Higgins region. 

“The blasts will sound between June and July to celebrate the start of this great project,” said El Teniente general manager Andrés Music during a session of the senate's mining and energy committee, which was held for the first time at the division's facilities.

Andesita and Andes involved an investment of US$4.2bn to extend the useful life of the mine and access higher-grade ore.

Last year El Teniente's output was 351,900t of copper and for this year production is expected to be in the range of 350,000-360,000t, said Music, who also highlighted the implementation of tech initiatives at the mine that has more than 4,500km of underground tunnels. “All the buses that enter the mine are electric,” the executive said.

Codelco registered a 8.4% drop in copper production last year to 1.3Mt due to lower ore grades. Delays in structural projects also caused the company's Ebitda to fall to US$4.18bn from US$5.66bn the previous year, said its chairman Máximo Pacheco at the meeting.

Production of around 1.35Mt is expected for this year, and then a gradual increase to 1.7Mt in 2030, Pacheco said.

Among the main challenges is managing the company's debt and investment requirements to continue advancing with projects that allow Codelco to maintain its position as the biggest copper producer. "We have the largest copper reserves in the world: 47.5Mt of copper," said Pacheco.

Growing demand for copper offers opportunities but also requires greater efforts on the production side, according to Álvaro Merino, executive director of Chilean consulting firm Núcleo Minero and former research manager at Sonami. He told BNamericas that global production of around 50mn electric vehicles is expected by 2030 and will demand an additional 3Mt of copper compared to the current supply.

“We would not be able to satisfy the increase in demand because, in addition to the decrease in copper grades, there are financing limitations due to the increase in interest rates," said Merino. "The period in which the cost of credit will normalize is key. Protecting and strengthening the conditions for the mining sector to expand is a strategic issue for Chile."