Chile’s state-owned mining company, Codelco, the world’s largest copper producer, reported a 29% decline in its pre-tax profit for the first three months of 2024, landing at $849 million. The company attributed the drop to setbacks and delays in launching key projects.
Codelco’s copper output totaled 295,000 metric tons during the quarter, down 10% from the same period last year. Including production from its stakes in Freeport’s El Abra and Anglo American Sur mines, the company’s total output amounted to 319,000 tons.
The company has been struggling to boost its production, which has fallen for two consecutive years to reach a 25-year low, due to a variety of challenges. These include a rock burst incident at the flagship El Teniente mine last year, a temporary stoppage following a fatal accident at the Radomiro Tomic mine, geological limitations at the Minister Hales site, and start-up delays at the Rajo Inca project.
Despite the production declines, Codelco was able to reduce its production costs by 5% to $1.939 per pound, benefiting from lower energy and fuel prices, a more favorable exchange rate, lower operational costs, and a build-up of inventories.
Earlier this month, Codelco had provided an estimate for its production figures, with Chairman Maximo Pacheco stating that a recovery was underway. The company has forecasted that it will at least match the prior year’s production for 2024, with output between 1.325 and 1.390 million tons.
However, the company’s production outlook remains uncertain, as Mining Minister Aurora Williams noted that April numbers are expected to be lower than expected after a worker died in an accident at the Radomiro Tomic mine, leading to a temporary shutdown of production.
In addition to its focus on copper, Codelco has also been tasked by President Gabriel Boric to play a leading role in the state’s involvement in lithium mining, a key battery metal for the energy transition.