Chile’s Codelco posts 2023 profit dip as production falls

SANTIAGO (Reuters) -Chilean copper giant Codelco reported gross profit of $3.12 billion for 2023, the state-owned producer said in a filing on Thursday, a 34% dip from a year earlier after the state firm faced operational and production challenges.

Codelco, the world’s top copper miner, posted production of 1.325 million metric tons for the year – its lowest level in a quarter century – according to the filing, compared to 1.446 million tons in 2022.

Despite the drop, along with a pre-tax profit decline of 74% year on year to $719 million, Codelco said it expected improvements soon, with a recovery in output by 2030.

“2023 was a very difficult year in terms of operations and production, but we are convinced that it was the lowest part of a productive trough that will begin to improve this year,” Chief Executive Ruben Alvarado said in a statement.

“Going forward, we expect positive news and a gradual recovery until we return to our production level of 1.7 million tons by the end of the decade,” he added.

For 2024, the company predicted copper output would remain steady at between 1.325 and 1.390 million tons, and expected a capital expenditure of $4 billion to $5 billion.

Codelco logged earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.184 billion, down more than a quarter from 2022.

A Reuters investigation published earlier this month showed that Codelco project delays, accidents and deferred maintenance have all contributed to its recent slump, as some workers pinned most of the blame on management and planning.

Codelco said work was moving forward at two flagship projects, the open-pit mine of Chuquicamata and the El Teniente complex, but with delays.

At Chuquicamata, an expanded productive area had allowed for increased extraction, but at a slower pace than initially planned, Codelco noted.

At El Teniente, delays included the construction on a tunnel for transporting minerals. Several projects in the complex are expected to start production through the course of this year, with another slated for 2026.

The national mining company has also been tasked by the government with leading future lithium projects in the South American nation, and is negotiating public-private agreements.

The government of President Gabriel Boric has said it will reserve for majority control via Codelco two of Chile’s most lithium-rich salt flats, Atacama and Maricunga.

(Reporting by Daina Beth Solomon, Natalia Ramos and Marion Giraldo; Editing by Sarah Morland and Christopher Cushing)