Codelco signs early agreement with Salvador mine supervisors
The 36-month agreement will start on May 1, 2025.
Codelco is losing its chief financial officer in the latest setback to Chile’s state-owned copper behemoth, as slumping output erodes profit and pushes up debt levels.
Alejandro Rivera resigned as CFO a day after Codelco’s investment-grade credit rating was cut one notch by Moody’s Investors Services, pushing down bond prices. Rivera’s departure follows the appointment of Ruben Alvarado as chief executive officer, the third CEO in just over a year.
Codelco is playing catchup after decades of underinvestment at its aging deposits in Chile, but with costs surging and production at the lowest in a quarter century its status as the world’s No. 1 producer is in jeopardy. The reshuffled management team will be tasked with steadying the ship as mine mishaps and project delays exacerbate the impact of deteriorating ore grades.
After eight years in the role, Rivera will depart on Nov. 3 to take up “other professional challenges,” Codelco said Thursday. No replacement was named.
The news comes after Moody’s lowered the firm’s rating to Baa1 from A3 late Wednesday, assigning a negative outlook with Codelco set to “remain weakly positioned” and struggle to restore earnings growth.
Bonds due 2034 slumped 1.88 cents to 93.47 cents on the dollar as of 10:40 a.m. in New York. The notes have dropped from 99.58 cents when they were sold last month.
Codelco’s production slump has set up a three-way battle for the title of the world’s largest copper miner. Freeport McMoRan Inc. briefly took the top spot from Codelco last year, and BHP Group is also challenging for the mantle after buying Australia’s OZ Minerals Ltd. In fact, the Melbourne-based firm produced more than Codelco in the second quarter.
To be sure, Codelco chairman Maximo Pacheco has said production is bottoming out this year, with a gradual recovery set to start in 2024 as projects come on stream.
Output setbacks across the copper mining industry have provided a key support to prices as the demand outlook has deteriorated. Supply challenges look set to intensify as the energy transition drives a sharp rise in usage in electric vehicles and renewables.
For now though, prices are coming under pressure amid mounting evidence that chronic supply constraints are starting to ease as demand in traditional industrial sectors wilts.
Copper was down 0.6% at $7,906 a ton on the London Metal Exchange on Thursday, the lowest since May.
Moody’s had put Codelco under review for downgrade in late August.
(By James Attwood, with assistance from Mark Burton and Dale Quinn)
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