Codelco trims copper guidance on El Teniente accident

Codelco

Codelco trims copper guidance on El Teniente accident but still signals a gradual production recovery into 2026 and beyond. The Chilean state miner now forecasts 2025 output at 1.31mn-1.34mn t, down from 1.34mn-1.37mn t. However, Codelco trims copper guidance on El Teniente accident while still expecting volumes to exceed 2024 levels and support its 2030 growth plan.

El Teniente setback weighs on short-term copper supply

Codelco trims copper guidance on El Teniente accident after a fatal incident on 31 July cut third-quarter production by 22,100t. The mine, which produced 356,000t last year, will need up to three years to regain capacity. As a result, global copper supply for 2025–26 looks tighter than previously expected.

The accident caused six deaths and triggered a deep review of safety and infrastructure at El Teniente. Codelco has started comprehensive safety and monitoring reforms, with a full incident report due by late 2025. Meanwhile, other assets such as Ministro Hales and Rajo Inca helped offset part of the lost tonnage. Rajo Inca has already added 21,200t this year, with construction 93pc complete.

Codelco’s January-September copper output rose 2.1pc year on year to 937,000t despite the setback. Including stakes in El Abra, Anglo American Sur and Quebrada Blanca, total group production reached 1.016mn t, up 1.4pc. This underscores how Codelco trims copper guidance on El Teniente accident while still stabilising the broader portfolio.

Financial resilience and capex support long-term target

Codelco delivered resilient financials in the first nine months of 2025, helped by firmer copper prices. Pre-tax profit slipped slightly to $606.9mn, just 0.86pc below last year’s level. Ebitda, however, rose 3.4pc year on year to $4.16bn, while contributions to the state treasury climbed 16.5pc to $1.24bn.

The company has executed $3.61bn in capital expenditure to September, within its $4.3bn-5bn annual range. Structural projects aim to stabilise and then lift production over the next decade. Management still targets 1.7mn t of copper output by 2030, anchoring Chile’s role as a core supplier.

Codelco’s trimmed guidance adds another constraint to global copper balances for 2026. Last month, the group lifted its 2026 European copper cathode premium to a record $325/t. That represents almost a 40pc increase from this year, reflecting tighter supply, elevated logistics costs and rising disruption risk.

The Metalnomist Commentary

Codelco’s modest guidance cut shows how operational shocks at a single Tier-1 mine can ripple through global copper markets. The record 2026 European premium underlines that smelters and fabricators increasingly pay for reliability, not just metal units. For downstream users in energy transition sectors, hedging both price and physical availability will remain a strategic priority as large brownfield projects navigate safety upgrades and complex ramp-ups.

Chile to Boost Global Copper Production Share by 2034

Chile Copper

Strategic Mining Investments Propel Growth

Chile is poised to increase its stake in the global copper market significantly, with the Chilean copper commission, Cochilco, projecting that the country will enhance its share from 24% in 2023 to 27% by 2034. This growth is anticipated to come from new mining projects and expansions in the sector.

Rising Production and Investment Trends

According to Cochilco's recent forecast, Chile will see a steady increase in copper production, achieving a peak of 6.07 million tonnes by 2027. The forecasted growth represents a 5.6% increase annually over the next decade, culminating in a production of 5.54 million tonnes by 2034, up from 5.25 million tonnes in 2024. This expansion is supported by Chile’s extensive mining investment portfolio, which includes significant initiatives like the proposed $7.5 billion expansion of the El Abra mine, a collaborative effort between the U.S. firm Freeport-McMoran and Chile's state copper company, Codelco.

Shift in Production Dynamics

Cochilco’s report also highlights a shift towards the production of copper concentrates, which are expected to constitute 88% of Chile’s total copper output by 2034, up from 80% in 2024. This change is due to a decline in copper cathode output, driven by the depletion of oxide deposits. Additionally, global copper production is projected to reach a peak of over 25 million tonnes in 2026, before a gradual decline to around 20 million tonnes by 2034.

Freeport-McMoRan Plans Copper Mine Expansions in Arizona and Chile

Freeport-McMoRan Copper

Freeport-McMoRan, the Arizona-based mining giant, has announced ambitious plans to expand its copper mining operations to meet the rising demand for the metal, particularly driven by electric vehicle (EV) production and infrastructure development. The company outlined key projects in Arizona and Chile slated for 2025 and beyond.

Expansion Projects in Arizona and Chile

• Bagdad Mine (Arizona): Freeport plans to double the concentrator capacity of the Bagdad mine to produce 200–250 million lbs of copper annually. It is set to become the first Freeport mine with a fully autonomous haulage system, transitioning its fleet to 100% automation.
• Lonestar/Safford Mine (Arizona): Exploration studies are ongoing, with results expected by late 2024. This could pave the way for significant capacity increases.
• El Abra Mine (Chile): An expansion at the El Abra site is under review, with environmental impact studies scheduled for submission by the end of 2025.

Copper Production Trends and Market Dynamics

In the third quarter, Freeport's copper production fell 3% year-on-year to 1.05 billion lbs, but year-to-date production remains up by 1.8% at 3.17 billion lbs. Consolidated molybdenum production for the quarter was steady at 20 million lbs, though year-to-date figures are down 6% to 58 million lbs.

Despite the mixed production figures, copper prices averaged $4.32/lb during the quarter, a notable increase from $3.86/lb in the previous year, bolstering revenues.

Regional Production Overview

1. North America: Copper production dropped by 9% to 313 million lbs due to lower ore grades and operating rates, with the Morenci joint venture experiencing the most significant decline. However, molybdenum production in the region rose by 14% to 8 million lbs.
2. South America: Copper output decreased by 2% to 299 million lbs, largely attributed to shipment timing and reduced output at Cerro Verde.
3. Indonesia: Copper production rose by 0.7% to 439 million lbs. However, a fire at the Manyar smelter in October may impact fourth-quarter figures.

Financial Performance

Freeport reported a quarterly profit of $526 million, up from $454 million a year ago, supported by a revenue increase to $6.8 billion from $5.8 billion.

Demand Outlook

Freeport is cautiously optimistic about the future of copper demand, citing:

• Increased EV-related demand from China, supported by anticipated government stimulus.
• Balanced US demand with strong performance in power cable and building wire markets offsetting weaknesses in residential and auto sectors.

With these expansions, Freeport-McMoRan is positioning itself to capitalize on growing copper demand while navigating regional production challenges.

Codelco Reports Higher Profits Despite Decline in Copper Production

Chile's state-owned mining giant, Codelco, has announced a notable increase in profits for the first half of 2024, even as its copper production saw a significant decline. This paradoxical outcome underscores the complex dynamics at play within the global copper market.

During the first half of 2024, Codelco's copper production fell to 580,000 fine metric tonnes (tmf), representing an 8.4% decrease compared to the same period in 2023. Including output from its stakes in the El Abra and Anglo American Sur mines, which it owns 49% and 20% respectively, the total production amounted to 628,000 tmf. Copper sales also saw a reduction, dropping by 8% to 791,000 tmf in the first six months of the year compared to the same period last year.

Several operational challenges contributed to the decline in production. The Radomiro Tomic mine faced reduced processing capacity due to an accidental death in March, while the El Teniente mine encountered geotechnical constraints. Additionally, the Ministro Hales and El Salvador mines experienced operational delays.

Despite these setbacks, Codelco reported a remarkable profit of $653 million for the first half of 2024. This marks a stark turnaround from the $316 million loss recorded in the same period of 2023. The primary driver of this profit surge was the increased price of copper, which averaged $4.23 per pound during this period, up from $3.90 per pound a year earlier.

Codelco's CEO, Ruben Alvarado, expressed optimism about the future, stating that the company anticipates a gradual increase in production in the latter half of the year. He outlined a strategic goal for Codelco to progressively enhance its production capacity, aiming to reach a level of 1.7 million tonnes by 2030.