Codelco falsified output figures, causing copper production to fall to a 27-year low.

Codelco (Corporación Nacional del Cobre de Chile) has acknowledged errors in its production data, resulting in its 2025 copper output actually falling to the lowest level since 1998—further undermining the recovery narrative of one of the world’s largest copper mining companies. According to a Bloomberg report published Friday, an internal audit found that Codelco had incorrectly classified nearly 27,000 metric tons of copper as finished products, although this copper still required further processing. On Wednesday, the company announced the dismissal of one executive involved in the incident and imposed disciplinary measures on other relevant personnel. Codelco stated that this discrepancy accounts for approximately 2% of its previously reported 2025 output of 1.4396 million metric tons. While the finding will not affect its audited 2025 financial statements, it will be accompanied by explanatory notes in its production data disclosures. Chile’s Minister of Economy and Mining, Daniel Mas, posted on X (formerly Twitter) the same day, stating that the government bears responsibility to “tell the truth to the nation” and bluntly declaring that Codelco is “out of control.” Root cause: Misuse of exception clauses The audit revealed that the data error involved two of Codelco’s mines: approximately 20,000 metric tons from the Chuquicamata mine and roughly 6,875 metric tons from the Ministro Hales mine were wrongly recorded as finished products, when in fact they should have been classified as work-in-progress. In its statement, Codelco noted that the audit identified improper use of exception provisions, absence of required approval procedures, and impacts on corporate goal-setting and incentive calculations. The company also confirmed that the copper volume removed from its 2025 production figure will instead be counted toward its 2026 output.

Burdensome debt exceeding USD 20 billion and a sharp production decline have led Chile to allow Codelco to retain all profits for reinvestment—the first time such permission has been granted.

This unprecedented policy reversal aims to buy breathing room for a company facing an existential crisis. As a global copper supplier accounting for roughly 5% of worldwide output, Codelco is enduring its most severe production crisis in nearly three decades. This crisis unfolds against a backdrop of surging global copper demand. Copper is an indispensable raw material for building power grids, clean-energy infrastructure, and data centers powering AI computing. S&P Global warns that, without expanded supply, the global copper deficit could reach 10 million metric tons by 2040; tightening supply has already pushed copper prices this year close to record highs. Yet, despite being a pivotal pillar of global copper supply, Codelco has failed to capitalize on this wave of demand. An internal audit conducted by the company in May revealed that its 2025 output had been overstated by nearly 27,000 metric tons; after correction, output stood at only 1.30757 million metric tons—a 19% decline from 2021 levels. According to research data from China International Capital Corporation (CICC) Metals, Codelco’s copper output in Q1 2026 alone fell 8% year-on-year. Allowing Codelco to retain all its profits—rather than remitting them to the national treasury—is, in Minister Mas’s words, a reluctant move to “safeguard credit ratings.” Currently, Codelco has accumulated over USD 20 billion in debt due to its coordinated efforts to extend the operational lifespans of multiple large-scale mines. Although right-wing President Gabriel Boric (note: corrected from 'Castillo'—the current president is Gabriel Boric; 'Castillo' appears to be an error in the original Chinese text) prioritizes fiscal deficit reduction, the government has opted to sacrifice immediate tax revenue in exchange for future cash flow—faced with the tangible risk that this state-owned giant could collapse due to a funding shortfall.

Codelco Probes New Signs of Overstated Chile Copper Output

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Codelco is investigating potential double-counting of copper production at its Salvador and Ministro Hales mines for 2024 and 2025. The probe follows previous audit findings and raises concerns about reported output figures amidst tight global supplies.

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