(Bloomberg) -- Codelco’s new chairman signaled a shift toward profitability over production volume at his first board meeting leading the Chilean state-owned copper giant.
“Our mandate is not to produce for the sake of producing, but to do so safely, efficiently and profitably,” Bernardo Fontaine was quoted as saying in a statement on Thursday.
The economist, a longtime critic of Codelco’s governance and efficiency, was appointed by Chile’s new right-wing President Jose Antonio Kast to help improve the company’s operational and financial performance. At Thursday’s meeting, directors agreed to maximize contributions to the state while seeking to avoid increasing debt, which is near record levels.
The comments suggest a change in emphasis from predecessor Máximo Pacheco’s drive to restore production growth after years of setbacks at projects aimed at overhauling aging mines. Increased scrutiny of investment decisions could temper expansion plans and help keep the global copper market tight as demand rises from the energy transition and data-center build-out.
The board also instructed its audit committee to hire an external forensic auditor to review the calculation of 2024-25 production figures and the costs associated with renovating Codelco’s headquarters.
The move follows the discovery of production overcounting that led to the dismissal of an executive and a prosecutor’s investigation. After removing incorrectly classified material, Codelco’s 2025 output would be its lowest since 1997. Still, Codelco reported first-quarter production on Friday that was in line with what Pacheco revealed in a interview last month.
Output in the first three months fell about 8% from the year-earlier period as the company continued to grapple with the fallout from a fatal accident at El Teniente. The result was also dragged down by lower ore grades at Hales, plant issues at Chuquicamata and maintenance elsewhere. Still, Codelco delivered $430 million to the state, up 94% from a year earlier, as a 31% jump in realized prices offset a 10% increase in costs.
On Thursday, directors also agreed to strengthen governance and transparency and create a special committee to monitor issues related to the El Teniente collapse in July.
Fontaine said the company must “put the house in order” and restore confidence, while pursuing public-private partnerships and management changes to strengthen the miner’s long-term prospects.
(Adds first-quarter results in sixth and seventh paragraphs)
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