El Teniente tragedy reveals Codelco’s Deep rooted challenges – a warning to the industry

El Teniente tragedy is truly a warning to the industry. Codelco, Chile's state-owned copper giant, faces an existential crisis as the company struggles with declining output from 1.62 million tonnes in 2020 to 1.44 million in 2024 including lower production from its largest copper mines like El Teniente, Chuquicamata and Radomiro Tomic. The profitability of Codelco depends mainly on these mines. Codelco is currently facing significant operational and financial challenges. Without structural changes – such as the removal of the 10% royalty (scheduled to remain in place until 2028), consistently high copper prices above $4.00/lb, and the formation of strategic partnerships – the current financial model appears unsustainable.