Exclusive-Chile’s Codelco boosts copper output in final dash to meet 2024 target, sources say
2024.11.29 15:58
By Fabian Cambero and Daina Beth Solomon
SANTIAGO (Reuters) – Chilean state-run Codelco is making a late dash to rev up its production in a bid to hit 2024 targets, two sources and an internal document show, potentially turning things around after a weak first half of the year.
The world’s top copper producer, which is battling to revive output from a 25-year low, hopes to close the year with some 1.331 million metric tons of the metal, the two company sources said, which would be up 0.5% from last year and at the lower end of its target range.
In an internal memo seen by Reuters, the firm said its October output, already flagged by executives as strong, was 2.9% above target, the most concrete sign yet of its recent performance. Official data will be released in the coming days.
The annual and October figures are previously unreported.
The firm’s official annual target is 1.325-1.352 million tons of copper, with the top-end of the range lowered from 1.39 million tons in July.
Its 2024 plan targeted 116,500 tons in October, an internal document seen previously by Reuters showed. A 2.9% beat would suggest real production close to 120,000 tons.
Codelco declined to comment.
Copper is key for electric vehicles and the global green energy revolution, with rising demand pushing up prices.
LEADERSHIP ‘CONFIDENT’ TO HIT TARGET RANGE
The miner, which is also spearheading a state push into lithium, is battling to revive its copper production, hit by construction mistakes at key mines, accidents and a drop in ore grades, even as global demand for the metal rises.
It faced a challenging start to the year, including delays on the Rajo Inca project at the small Salvador unit and the death of a truck driver at Radomiro Tomic, prompting analysts to flag risks to it hitting annual targets.
The firm, however, has made a major production push in recent months, with executives growing more bullish.
Chairman Maximo Pacheco said on Nov. 7 that October was the best month so far this year and would be ahead of target, without giving details.
One of the company sources said the leadership was “confident” to land within the annual production target range. The person said key mines like El Teniente were ahead of target, while Salvador was behind. The giant Chuquicamata was on track.
A second source confirmed the production numbers and expectations. The final figure will depend on how quickly Codelco can ramp up output in the final stretch of the year.
To be sure, Codelco would have to keep up a furious pace to hit its goals. It would need over 400,000 tons of copper in the fourth quarter, 20% more than the third quarter.
In the big picture, even if it succeeds, production is still way off peaks a decade ago, analysts said.
“Whether or not it meets the goal, we can’t lose sight that Codelco is going through a significant crisis,” said Juan Ignacio Guzman, head of Chilean mining consultancy GEM.
