Codelco Reports Higher Profits Despite Decline in Copper Production

Chile's state-owned mining giant, Codelco, has announced a notable increase in profits for the first half of 2024, even as its copper production saw a significant decline. This paradoxical outcome underscores the complex dynamics at play within the global copper market.

During the first half of 2024, Codelco's copper production fell to 580,000 fine metric tonnes (tmf), representing an 8.4% decrease compared to the same period in 2023. Including output from its stakes in the El Abra and Anglo American Sur mines, which it owns 49% and 20% respectively, the total production amounted to 628,000 tmf. Copper sales also saw a reduction, dropping by 8% to 791,000 tmf in the first six months of the year compared to the same period last year.

Several operational challenges contributed to the decline in production. The Radomiro Tomic mine faced reduced processing capacity due to an accidental death in March, while the El Teniente mine encountered geotechnical constraints. Additionally, the Ministro Hales and El Salvador mines experienced operational delays.

Despite these setbacks, Codelco reported a remarkable profit of $653 million for the first half of 2024. This marks a stark turnaround from the $316 million loss recorded in the same period of 2023. The primary driver of this profit surge was the increased price of copper, which averaged $4.23 per pound during this period, up from $3.90 per pound a year earlier.

Codelco's CEO, Ruben Alvarado, expressed optimism about the future, stating that the company anticipates a gradual increase in production in the latter half of the year. He outlined a strategic goal for Codelco to progressively enhance its production capacity, aiming to reach a level of 1.7 million tonnes by 2030.