Codelco, Chile's state-run copper company, has seen a discernible rise in operating costs as a result of price jumps linked to the Middle East war, though the miner continues to expect to hit its production targets for coming years, Chairman Maximo Pacheco told Reuters on Monday.
The firm is targeting production of 1.344 million metric tons of copper this year after output fell to a quarter-century low in both 2022 and 2023. Management also maintains an ambition to raise annual output to 1.7 million tons by 2030.
Operationally, the conflict abroad has had direct effects on input prices. Pacheco said the crisis increased Codelco's cash cost by at least ten cents per pound - a change he described as substantial. He added that the mining sector's major concern is maintaining operational continuity, noting it has become progressively more challenging to produce copper.
One concrete step Codelco took to limit the immediate impact was to secure a year’s supply of sulfuric acid - a material essential to copper processing - before its price ascent. That procurement, according to Pacheco, gives the company the ability to "weather the current situation with sulfuric acid with relative ease."
On production volumes, Codelco reported output of 271,300 tons of copper in the first quarter. Pacheco attributed the decline versus the prior year to scheduled maintenance, and said the result was otherwise in line with expectations.
While the company faces higher per-unit costs driven by input-price inflation connected to geopolitical developments, Codelco's leadership remains focused on meeting its medium-term production objectives and preserving operational continuity amid a more difficult production environment.
Summary of facts:
- Codelco's cash cost rose by at least $0.10 per pound due to price increases tied to the Middle East war.
- Production target for this year: 1.344 million metric tons; 2030 target: 1.7 million tons.
- Output in Q1: 271,300 tons, down from last year because of scheduled maintenance.
- The company purchased enough sulfuric acid to cover the full year before prices climbed.