Codelco Rules Out Reaching 2026 Production Target
Miles Bennett
Codelco's new chairman Bernardo Fontaine admitted the company will miss its output target for the seventh straight year, calling a return to 1.7 million tonnes within four to five years flatly impossible — a confession that underscores why copper prices stay near record highs.
Seven years of misses — how far off is Codelco?
Fontaine's own words: "In seven years, Codelco has never hit a production forecast — this year will be no different."
The company's March guidance puts 2026 output at 1.331–1.357 million tonnes. The prior decade-end goal was 1.7 million tonnes. This means → even at the top of the range, actual output trails the target by roughly 20%.
In plain terms = the world's largest copper miner has taken "recover to pre-pandemic levels" off the table entirely.
What is the new chairman's plan?
Fontaine took office in May. His core diagnosis: past management chronically over-promised on output and under-estimated obstacles.
The new priority is profitability over maximum tonnage. This means → Codelco would rather mine less and ensure every tonne earns its keep.
Timeline: a profitability-focused recovery plan is due in October–November. That release is the next key credibility test for the market.
Where will the money come from — and why invite private partners?
Codelco has frozen all new project approvals and launched a full review of existing capital spending.
The company plans to bring in private-sector partners to co-develop mining assets. In plain terms = Codelco concedes it lacks the capital and capability to advance its full project portfolio alone.
On its 49% stake in the El Abra copper mine, Fontaine said "all options are on the table, including dilution." This signals a readiness to trade equity for resources.
Over $20 billion in debt — can the balance sheet hold?
Fontaine defended the financial position: the core challenge is operational, not financial.
But the reality: years of missed targets + rising costs + poor investment returns → a sharp decline in contributions to Chile's national treasury.
All of this while copper trades near record highs. In plain terms = when prices are this good and you still can't deliver, the problem is internal.
What does this mean for the copper market?
Codelco's struggles are not unique — miners globally face declining ore grades and rising extraction costs.
Persistent supply-side shortfalls are a key reason copper prices stay near historic highs. This means → as long as major producers can't dig enough copper, prices have a hard floor.
The flip side: if Codelco fails to improve operations, it risks missing the demand boom driven by data centers and electric vehicles.
Content is for reference only, not financial advice.