Codelco Copper Output Audit Finds 2025 Overstatement
CHILE · MINING
Key Facts
—What happened: A forensic audit found Codelco overstated 2025 copper output by 26,875 tonnes.
—How big it is: That is about 2% of annual output, worth roughly US$386 million at current prices.
—What it means: The inflated figures may have masked weaker performance and triggered bonuses.
—The catch: No one has been charged, and former chairman Máximo Pacheco denies wrongdoing.
—Who it hits: Codelco’s reputation, Chilean taxpayers, and investors who rely on its reports.
—What comes next: Prosecutors say they will need a statement from Pacheco, who denies wrongdoing.
A forensic audit says Codelco overstated 2025 output by nearly 27,000 tonnes. The company took the finding to prosecutors itself, and no one has been charged.
The accusation
A Codelco copper output audit found that the company overstated its 2025 production by 26,875 tonnes of fine copper. That is roughly 2% of annual output, and the company has acknowledged the error.
The audit was commissioned by Codelco’s audit, compensation and ethics committee, chaired by Tamara Agnic. It closed on May 20, 2026, and its findings were later reported by Chilean media.
The audit was triggered by an anonymous tip to Codelco’s ethics hotline on March 3, 2026. Codelco’s own board then filed a complaint with the Public Prosecutor.
The copper at stake is worth roughly US$386 million. That is 26,875 tonnes priced at the 4 September close of US$6.52 a pound.
How the overstatement happened
The audit places the practice at two divisions, Chuquicamata and Ministro Hales. At Chuquicamata, the audit says about 20,000 tonnes of oxide stocks were recorded as finished product.
At Ministro Hales, the audit says 6,875 tonnes of arsenic-bearing material were counted as finished. It still needed further treatment.
The effect was to make it look like more copper was ready for sale than actually was. The audit says this violated Codelco’s internal control norms.
Who is making the accusation
The accusation is not from a single person. It comes from Codelco’s own forensic audit, which the new board ordered.
On May 20, 2026, Daniel Mas. Chile’s combined economy and mining minister, said Codelco was ‘a company that, without doubt, is out of control’.
He spoke after the audit’s findings became public.
No regulator has opened a separate case. But opposition deputies Jaime Mulet and Marcela Hernando filed their own criminal complaint on June 4.
They allege fraud against the state. The Chamber’s mining commission has taken up the matter.
Where the former chairman stands
Máximo Pacheco was Codelco’s chairman from 2022 until May 2026. The 2025 figures were published while he was chairman, and no one has accused him of wrongdoing.
Pacheco has not been charged with any offence and denies wrongdoing. He has rejected the criticism, saying the comments were baseless.
He said the strong December 2025 numbers reflected a technical inventory clean-up, not deliberate manipulation. In a separate statement from May 6, 2026, he acknowledged Codelco’s significant debt, attributing it to decisions made over time.
Codelco’s own acknowledgment
Codelco has formally recognized a ‘serious deviation’ in its copper records. The company admitted the 26,875-tonne overstatement was incompatible with its internal control norms.
This acknowledgment triggered the criminal investigation. Codelco’s board also voted to dismiss its budget and management control manager, César Márquez Márquez.
The board issued disciplinary warnings to seven other executives. The audit flagged eight people in all.
No one has been charged.
The criminal investigation
On May 26, 2026, Chile’s Public Prosecutor’s Office appointed regional prosecutor Aquiles Cubillos to lead a criminal case. Prosecutors have described the case as one of ‘fraudulent over-estimation’ of 2025 copper production.
Cubillos has said he is examining possible falsification of public documents, embezzlement, disloyal administration and fraud against the state. He has ruled nothing out and stressed that nothing is proven.
In mid-August, prosecutors spent three days at Ministro Hales, Radomiro Tomic and Chuquicamata. On August 28, they searched the homes of current and former managers.
Nobody has been formally charged. Codelco has corrected its 2025 production figure from 1,334,445 tonnes to 1,307,570 tonnes; it has not restated its financial results.
What this means for Codelco and Chile
Codelco is state-owned, and its profits help fund the Chilean government. If the figures were inflated, it could mean the company’s financial health is weaker than reported.
The scandal also raises questions about corporate governance at Codelco. It comes at a time when the company is already struggling with falling production and high debt.
The bigger picture: Codelco’s declining output
Codelco recorded its worst first-quarter copper output in at least two decades in early 2026. The overstatement of 2025 figures may have masked this decline.
The company’s production has been falling for years. In 2022, it produced about 1.45 million tonnes, down 10.7% from the previous year.
The audit focused on 2025, but prosecutors have extended their work to Radomiro Tomic, a division the audit did not name. No evidence of earlier manipulation has been presented yet.
How the bonus system may have played a role
Production targets were tied to variable bonus payments. After the correction, Codelco required 6,322 workers to return about US$14.3 million in bonus payments.
Nobody has been charged, and the company has not said the payments were obtained dishonestly. Prosecutors have publicly framed the investigation around motive.
Chief prosecutor Javier Von Bischoffshausen said they are investigating the motivation behind Codelco claiming production volumes exceeding actual figures. The clawback is cited as part of the case file.
What the numbers do and do not prove
The 26,875-tonne overstatement is about 2% of Codelco’s annual production. At the 4 September 2026 copper price of US$6.52 a pound, that much metal is worth roughly US$386 million.
However, the overstatement does not necessarily mean that Codelco’s overall financial results were fraudulent. The company may have had legitimate reasons for some of the reclassification, though the audit found it violated internal norms.
CIPER has separately argued that Codelco’s US$7.04 billion of Treasury contributions between 2022 and 2025 were funded with new borrowing. That claim is the outlet’s own analysis, not an audit finding, and Codelco has not confirmed it.
Who is affected by the scandal
The main potential victims are Chilean taxpayers, who own Codelco through the state. If the company’s profits were overstated, the government may have received less money than it expected.
Investors and lenders who rely on Codelco’s financial reports are also affected. They may have made decisions based on inaccurate information, which could lead to losses.
Workers at Codelco could feel the impact too. If the company’s financial health is weaker than reported, there may be pressure to cut costs or delay projects.
That could affect jobs. The scandal also damages Chile’s reputation as a reliable mining investment destination.
Background: What Codelco is and why it matters
Codelco is Chile’s state-owned copper mining company, founded in 1976. It is the world’s largest copper producer, and its profits are a major source of government revenue.
The company operates several large mines, including Chuquicamata and El Teniente. Its output feeds global demand for copper, which is used in electronics, construction, and renewable energy.
Because Codelco is state-owned, its financial results directly affect Chile’s national budget. When the company reports strong profits, the government can fund public services.
When it reports losses, taxpayers feel the impact. This is why the accusation of dressing up copper output is so serious.
Frequently Asked Questions
What exactly is Codelco accused of?
Codelco is accused of inflating its 2025 copper production figures by 26,875 tonnes. The audit says this was done by reclassifying material in process as finished product.
Who made the accusation?
The accusation comes from Codelco’s own forensic audit, which was reported by Chilean media. The government’s mining minister also called it ‘unacceptable’.
Was former chairman Máximo Pacheco directly accused?
No. No official has accused him of ordering anything, and he has not been charged.
What has Pacheco said in response?
Pacheco has called the accusations ‘baseless comments’. He says the high figures were due to a technical inventory clean-up, not manipulation.
What happens next in the investigation?
Prosecutors are investigating and may call Pacheco to testify. The company may also need to restate its 2025 results.
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