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| Codelco El Teniente Mine |
Chile’s state-owned copper giant Codelco, the world’s largest copper producer, is forecasting slight production growth for 2025 and 2026, despite a deadly mine accident at its El Teniente operation. This projection signals resilience in the face of disruptions that have impacted global copper supply.
Resilient Outlook Despite Setbacks
Codelco's chairman, Máximo Pacheco, revealed that the company expects copper output for 2025 and 2026 to slightly exceed 2024 levels. This is a positive signal for a global copper market already under strain. Despite challenges, including the tragic collapse at El Teniente mine in July, the company is poised to boost its production by a modest margin. Codelco produced 1.4 million tonnes of copper in 2024, and this output is expected to rise marginally this year.
Earlier in October, Codelco revised its production forecast following the El Teniente accident, which caused a loss of 48,000 tonnes, up from an earlier estimate of 33,000 tonnes. Although this mine, which produced 356,000 tonnes last year, remains Codelco’s most profitable, the incident highlights the ongoing risks in the mining sector. Still, Codelco's overall performance shows the company’s resilience in mitigating such setbacks.
Production Growth Despite Challenges
In the first three quarters of 2025, Codelco reported a slight increase in copper output, reaching 937,000 tonnes, a 2.1% year-over-year gain. This growth was achieved despite the disruptions caused by the El Teniente accident. The total production for the quarter, which includes contributions from other operations like El Abra, Anglo American Sur, and Quebrada Blanca, rose by 1.4% to 1.016 million tonnes compared to the same period last year.
Codelco attributed this growth to several key factors, including improvements at its Ministro Hales mine, where multi-level extraction techniques have enhanced productivity. The Rajo Inca project in Salvador, which began ramping up in December 2024, also contributed significantly, adding 21,200 tonnes of copper to this year’s output. Despite these positive developments, the El Teniente mine still faces lingering production challenges.
Long-Term Outlook and Risks
The effects of the El Teniente accident are expected to be felt for some time, with consultancy firm Plusmining noting that the full impact of the production loss won’t be fully realized until later years. Codelco’s long-term goal of restoring pre-pandemic production levels of 1.7 million tonnes faces additional hurdles as the company deals with aging infrastructure and significant debt. Codelco is currently one of the most indebted mining companies globally, with debt levels reaching six times its earnings before interest, taxes, depreciation, and amortization (EBITDA).
Analysts from BMO Capital Markets have expressed concerns that the mine collapse could disrupt the company's ability to meet copper supply forecasts. They now predict global copper deficits of about 200,000 tonnes in 2025 and 300,000 tonnes in 2026, which could support copper prices around $10,500 per tonne.
ScrapInsight Commentary
Despite the production setbacks caused by the El Teniente mine accident, Codelco’s outlook remains resilient. However, challenges such as aging infrastructure and high debt levels may continue to affect the company’s long-term growth. A tight global copper market, compounded by potential deficits, suggests continued upward pressure on prices in the coming years.
