Chile’s Codelco, World’s Largest Copper Producer, Reports Return to Profitability

RIO DE JANEIRO, BRAZIL – On Friday, October 30th, Chile’s state-owned mining company Codelco, the world’s largest copper producer, reported an 86 percent increase in its profit for the first nine months of the year, to US$1.124 billion, after an increase in production.

The company, which turns over all its profits to the federal government, said production rose 4 percent year-on-year to 1.165-million tons in the first nine months. The company said its cash cost fell 11.3 percent to US$1,269 per pound between January and September.

Codelco Chief Executive Octavio Araneda said the latest results should generate among workers “energy and conviction” for the “marathon” required as the company faces the combined challenges of falling ore grades, costly overhauls and stringent safety measures necessitated by the pandemic.

The Chilean government is also dependent on its key mining industry generally – and Codelco specifically – to help fund an ambitious emergency social spending package to counter the fallout of the pandemic and simmering social unrest.

The company said in its earnings statement that “operational continuity, greater processing capacity and improved mineral grades” explained the increase in production.

“During this time we achieved higher production, higher sales of copper and by-products from our wholly-owned mines, lower costs and higher productivity,” Araneda was quoted as saying in a statement.

Adding in production from its stakes in Freeport’s El Abra and Anglo American Sur, total production rose to 1.243 million tons to September.

The company added that it was looking for “alternatives to move forward” with its plans to build a desalination plant for its northern operations, after saying in November it would tear up its contract with a consortium led by Japanese firm Marubeni.

Other projects, to transform the massive Chuquicamata into an underground mine, maintain production capacity at Andina and build a new level at its flagship El Teniente mine, were back in progress after being stalled during the worst of the coronavirus outbreak, the company said.

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