Codelco Restructures Management Amid Resignations, Mounting Pressure

---

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Chilean state-owned copper mining company Codelco (Santiago, Chile) has announced that two top officials have resigned and that it is restructuring management functions to increase synergies.

Alejandro Rivera, Codelco's chief financial officer, and Nicole Porcile, vice president of corporate matters and sustainability, resigned last week, according to a company statement. Their departure came a month after Ruben Alvarado joined Codelco as the company's new chief executive officer.

Also, on Friday, Codelco said it would merge three vice presidencies that include operations in the north and center-south with foundries and refineries (FURE) into one. Mauricio Barraza was appointed to the new position.

"The changes are aimed at allowing greater synergy between related areas, simplifying and adjusting the dependencies of the executive presidency, focusing resources, ensuring a sense of urgency in productive areas, and prioritizing areas according to the challenges and current situation of the business," Codelco said in a statement.

The company also created the vice-presidency for mining resources, development and innovation. Nicolas Rivera was appointed to the position. The changes will be effective as of November.

The new chief executive faces mounting pressure as the copper producer has registered the lowest production outputs in years. In 2022, the company produced 1.45 million tons of copper, while the guidance for this year has been adjusted between 1.31 million and 1.35 million tons.

Meanwhile, delays in Codelco's structural projects, which are new developments aimed at increasing production, could further impact its performance as current mines are put under more stress.

Moody's downgraded Codelco's Euro Medium Term Notes, Global Bonds, Global Notes, and Senior Global Notes from A3 to Baa1. The downgrade follows lower output, higher costs and increased spending required to improve current production levels, according to the agency.

Based on the Moody's analysis, Codelco's weak production performance and higher costs increases the possibility of larger debt to fund investments, which include the structural projects needed to boost its output.

Industrial Info is tracking 47 projects from Codelco, worth US$16.34 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.

At the same time, the company is negotiating with lithium mining companies in Chile. Following the nationalization of the industry earlier this year, the government tasked Codelco with negotiating lithium mining contracts with companies such as Sociedad Química y Minera de Chile (SQM) (Santiago) and Albemarle Corporation (NYSE:ALB) (Charlotte, North Carolina), which already have operating projects in the country.

As a result, Codelco is expected to play a key role in Chile's lithium industry, which is one of the world's biggest producers of the metal, despite the setbacks it is facing in its copper output.

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, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).