Chile’s state-owned copper giant Codelco showed signs of recovery in September 2024. The company’s total copper production increased by 5.2% year-on-year, reaching 123,100 metric tons.
This upturn comes after a difficult period for Codelco, which saw its output hit a 25-year low in 2023. The improvement in Codelco’s performance contrasts with other major copper mines in Chile.
BHP’s Escondida, the world’s largest copper mine, experienced a 5.4% decrease in production. Its output dropped to 101,500 metric tons in September.
However, the Collahuasi mine, jointly operated by Glencore and Anglo American, saw a significant increase. Its production rose by 14% to 51,400 metric tons.
These mixed results contributed to an overall growth in Chile’s copper production. The country’s total output increased by 3.8% to 474,800 metric tons in September.
This growth is crucial for Chile’s economy, as copper remains its primary export. Codelco’s Chairman, Maximo Pacheco, expressed optimism about the company’s future.
He stated that October was Codelco’s best production month in 2024. The company exceeded its target for that month. This positive trend suggests Codelco may be on track to meet its 2024 production goals.
Codelco’s Production Challenges and Strategic Investments
Despite the recent upturn, Codelco still faces significant challenges. The company’s production for the first nine months of 2024 was lower than the same period in 2023.
From January to September, Codelco produced 918,000 tons of copper. This figure is down from 966,000 metric tons in the previous year. Several factors contributed to this decline.
Delays in starting production at the Rajo Inca project played a significant role. The project was originally scheduled to begin operations in the first half of 2024.
However, progress was only at 87.7% by September, pushing back the timeline. Codelco aims to gradually increase its production to 1.7 million tonnes by the end of the decade.
For 2024, the company expects to produce between 1.32 and 1.35 million tonnes of copper. This would be a slight improvement from the 1.32 million tonnes produced in 2023.
The company‘s financial performance has shown some improvement. In the first nine months of 2024, Codelco’s EBITDA rose 24% year on year to $4.02 billion.
The company remains on track to contribute around $1.5 billion to Chile’s Treasury this year. Copper prices have provided some relief to Codelco. Prices have remained above $9,000 per tonne, helping to offset production challenges.
This price stability benefits Chilean mines, which generally have lower operating costs. Looking ahead, Codelco plans to invest more than $4.5 billion in projects this year.
These investments aim to boost production and efficiency across its operations. The company is also exploring partnerships with other major mining companies for future growth.
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