Codelco to Conduct Audit on Production Calculations

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Codelco's new chairman has initiated an external audit of the company's 2024-2025 production calculations after an internal review revealed significant overestimations of more than 20,000 tonnes, with disciplinary actions taken against involved employees. The company aims to produce between 1.331 and 1.357 million tonnes of copper in 2026.

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Audit Called For

Codelco's new Chairman, Bernardo Fontaine led the first directors meeting of the company since being appointed by Chile's new president, Jose Antonio Kast. During the meeting, the board instructed the Audit, Compensation, and Ethics Committee (CACE) to hire and conduct an external forensic audit into Codelco's 2024--2025 production calculations.

Industrial Info Resources data find 60 Codelco-owned projects across Chile, amounting to US$21 billion.

Earlier, in May, an internal Codelco audit on 2025 production volumes uncovered that the company had overestimated its output by 20,000 fine metric tonnes contained in oxides from Chuquicamata and 6,875 fine metric tonnes contained in calcium arsenite from Ministro Hales, representing about 2% of Codelco's own 2025 output.

"The investigation determined that these materials required further processing, did not fully meet the conditions required by internal regulations to be considered finished products, and should have remained recorded as work-in-process," said Codelco in a statement.

Following the internal audit findings in May, the Chilean company fired one executive involved in the overcalculation and sanctioned the remaining seven.

For 2025, Codelco had reported a production from its own mines of 1.334 million fine metric tonnes and 1.439 million fine metric tonnes, including its stakes at El Abra, Anglo American Sur, and Quebrada Blanca.

Codelco said it will issue clarifying notes regarding the production figure included in its annual report, reasoned analysis, website and other official communications.

For this year, however, the company has set a target between 1.331 million fine metric tonnes and 1.357 million fine metric tonnes of copper across its own operations.

Alongside the announcement of the external audit, the board requested maximizing contributions to the state, without increasing debt, as well as maintaining operational, financial, environmental and social stability.

"We bear an enormous responsibility toward Chile. We will have to be creative--to dare to drive profound changes in order to build a Codelco that is more robust and better prepared for the long-term challenges ahead. I am convinced that we can achieve this, because Codelco is capable of so much more," said Fontaine.

Structural Projects

For years, Codelco has been dealing with production declines from its high 1.7 million-tonne yearly production. The production drops have been driven by aging operations, lower grades at its mines, and delays in its structural projects, which are aimed at maintaining and increasing the company's output.

Industrial Info Resources is tracking 60 Codelco-owned projects across Chile, amounting to US$21 billion. This includes its copper mines as well as lithium projects, such as those of its new NovaAndino lithium joint venture with SQM.

Key Takeaways

• Codelco's new board has called for an external audit to investigate 2024 and 2025 production calculations.
• In May, the company found more than 20,000 extra tonnes in 2025 production estimates. For this year, the company seeks to produce between 1.331 million and 1.357 million tonnes of copper.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).