Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Chile’s Codelco, the world’s largest copper producer, on Friday posted a 8.4% drop in output for the first half of 2024 compared with the same period last year, to 579,785 metric tons, citing operational setbacks and difficult weather.
The company attributed the lower output to an extended truck stoppage following a fatal accident at its Radomiro Tomic mine, low contributions from El Teniente after a rock burst last year, ramp-up delays for Rajo Inca and adverse weather.
The state-owned miner said its pre-tax profit from January to June totaled $653 million, against a loss of $316 million in the same period last year.
Codelco has said this year’s output should top the 1.325 million tons produced last year, forecasting a range of up to 1.390 million tons as it expects output to pick up again in the second half of the year.
Analysts, however, say Codelco will struggle to reach that target in the coming months.
“We want to regain the ability to meet our targets in a timely and efficient manner, and these good financial results encourage us to keep up the effort,” chief executive Ruben Alvarado said in a statement.
“We are working to ensure that, starting this second half of the year, production will begin its long-term growth rate,” he said.
Codelco aims to progressively reach an output of 1.7 million tons by 2030.
The company is also spearheading an increase in state control over the country’s lithium industry, and in May finalized a deal with SQM, the world’s second-largest producer, in a tie-up that should grant SQM the ability to extract lithium in the prized Atacama salt flat through 2060.
(By Fabian Cambero, Natalia Siniawski and Sarah Morland; Editing by Daina Beth Solomon and Kirsten Donovan)
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