Codelco Chairman Calls for Private Partnerships Amid Production Crisis
Bernardo Fontaine warns that state-owned Codelco must partner with private miners to reverse declining copper production and address structural governance failures.
Board chairman Bernardo Fontaine warned that Codelco, Chile's state-owned copper producer, must establish extensive partnerships with private miners to reverse a steep decline in production. Despite investing $32 billion over the last eight years, the company's annual output fell from 1.7 million tonnes to 1.2 million tonnes, while operational costs rose to 78% higher than comparable operations.
An internal audit revealed that production figures were artificially inflated by 42,100 tonnes, a discrepancy that may require a $140-million accounting adjustment. Fontaine attributed these failures to structural governance weaknesses and a lack of state oversight, arguing that the company lacks the management capacity and capital to develop its million hectares of unexploited mining concessions.
While Codelco has previously partnered with firms such as Rio Tinto, BHP, and Anglo American, Fontaine noted that current legislation and complex approval processes continue to hinder private investment. New management has since established a more conservative annual production target of approximately 1.3 million tonnes.
