There is broad consensus within the industry that the suspension and closure of operations at El Teniente, for an as yet undetermined period, will negatively impact the company’s production and 2025 results, thereby compromising the copper production targets projected for the next five years.
By Carolina Lathrop
On Friday, July 31, “the mountain spoke,” as miners say, leaving the tragic toll of six fatalities among workers at the Andesita mine in El Teniente, operated by Codelco. The accident prompted an investigation by Sernageomin, which has kept 90% of operations at the deposit—located in Chile’s O’Higgins Region—halted, with no defined timeline for resuming activities.
Andesita, together with Diamante and Andes Norte, form part of the state-owned company’s structural projects, which are critical to Codelco’s investment plan aimed at overcoming a production stagnation that has lasted for roughly a decade. Recent events not only delay this plan but will also reduce output from Codelco’s main mine, which accounts for 26.8% of the company’s total production. In 2024, El Teniente produced 356,000 fine metric tonnes of copper out of Codelco’s total attributable production of 1.3 million tonnes.
Industry sources agree that the production goal announced in 2023 by Codelco’s Chairman, Máximo Pacheco—reaching 1.7 million tonnes by 2030—will be difficult to achieve and should be re-evaluated with a more realistic target date of 2036. In fact, specialists estimate that aiming for 1.5 million tonnes by 2030 is more attainable, despite Codelco’s insistence on maintaining the original timeframe.
Álvaro Merino, Executive Director of Núcleo Minero, notes that El Teniente produces approximately 1,000 tonnes of copper per day, and that each day of downtime costs Codelco an estimated US$9.5 million, based on the year-to-date average copper price of US$4.3 per pound.
Delays in the execution of key projects
Beyond the production impact, delays in the execution of critical projects could further affect company performance. According to Codelco’s first-quarter results report, Andes Norte had reached 78% completion, with initial production expected in Q3 2025; Diamante stood at 43% completion, targeting September 2026 for startup; and Andesita was at 70% completion, with production scheduled for Q2 2025. Industry consensus is that these deadlines will not be met.
Codelco has stated: “Across our portfolio of structural projects, we do not expect delays to their schedules. In the specific case of El Teniente, the investigations and technical assessments will determine how we proceed with advancing the project pipeline at this site.”
Juan Carlos Guajardo, Executive Director of Plusmining, explains that Codelco’s structural projects are at a particularly sensitive juncture. Beyond the well-known delays and cost overruns, the recent tragedy at El Teniente could prompt a deeper review of safety standards in ongoing works.
“This is not only necessary from a human perspective but could also impact project timelines, particularly at Chuquicamata and El Teniente. For El Teniente, the challenge is twofold: maintaining productive continuity at a mature, technically complex deposit, while simultaneously advancing the structural developments that ensure its future viability. If the recent events result in additional operational restrictions, it is reasonable to anticipate an effect on production levels,” he notes. In this context, Codelco faces a dilemma: how to balance short- term operational pressures with the strategic necessity of completing its structural project portfolio.
Another potential consequence of the stoppage is the possibility of a credit rating review by agencies, which have begun to analyze the financial implications of the suspension, although they still consider it premature to make a definitive decision.
The Role of Sernageomin
As part of the investigation, Sernageomin has requested four reports from Codelco. The Ministry of Mining has indicated that “it is not possible to determine a specific duration for the investigation, given the unique characteristics of this accident.” The Ministry added that for the lifting of the provisional measure, the company has already submitted a reopening request, to which Sernageomin responded by requesting additional data and documentation.
On Friday, August 8, Codelco announced that Sernageomin had authorized a partial and gradual restart of underground operations at El Teniente. However, for a safe and progressive resumption in the authorized areas, the company must still secure approval from the Labour Directorate. “Once these requirements are met, El Teniente Division will set the date and conditions for the return to work,” the company stated.
Measures required for the restart include continuous seismic and geotechnical monitoring, adherence to operational guidelines, and the dissemination of the reopening plan to all personnel.
The resolution issued on August 8 permits operations to resume only in specific sectors—Pilar Norte, Panel Esmeralda and Esmeralda, Pacífico Superior, Diablo Regimiento, Panel Reno, Dacita, and Reservas Norte—after on-site verification confirmed no imminent safety risks to personnel or facilities.
Meanwhile, operations remain halted in the Recursos Norte, Andesita, Andes Norte, and Diamante sectors, pending more exhaustive technical analysis and additional information from the company.
Codelco has committed to addressing any findings, gaps, or improvement opportunities identified in the ongoing investigation with full responsibility, implementing concrete, replicable measures across all operations and projects. “The impact of the El Teniente incident, both on production and on indicators such as productivity, is still being quantified, as it will depend on the scope and duration of the suspension,” the company stated.
Experts recommend that, given the unique characteristics of this mine, El Teniente should increase the use of advanced technologies such as remote production control, automation, robotics, artificial intelligence, and big data to enhance safety and reduce worker risk.
Other Mega-Projects
In 2016, aware of declining productivity across its mines, Codelco launched an ambitious investment program, known as the structural projects, aimed at boosting production. In addition to the El Teniente projects, the portfolio includes: Chuquicamata Underground, Phase 1 continuity infrastructure, operational since 2019 and 78% complete as of Q1 2025, alongside feasibility studies and permitting for the project that will conclude Level 1 extraction.
Rajo Inca, Division Salvador, at 91% completion, with ongoing works to optimize the concentrator and hydrometallurgical plants. Ramp-up of the concentrator is expected to finish in Q3 2025.
The Tocopilla desalination plant, being built by the Aguas Horizonte consortium for Codelco, reached 73% completion as of March 2025.
By the end of Q1, Codelco had executed US$1.157 million in capex, representing 21% of its annual budget of US$5.638 million. Physical progress stood at 23% of the 2025 plan.
A source familiar with the company notes that while these initiatives—expected to represent 75% of state-owned copper production by 2030—hold significant potential, their development has been slow and costly, with cumulative overruns of US$5.000 million (56% above projections, with some estimates as high as US$7.000 million). Production has fallen (down 10% in 2022, equivalent to 162,000 tonnes), debt has increased, and operational continuity issues persist (77% of management-related disruptions). This source suggests that, given the divisional deficits, low ore grades, and concentrator problems, one of the first measures should be to close Salvador Division.
For 2025, investment in the El Teniente project portfolio amounts to US$6.380 million; Rajo Inca (Salvador) to US$2.704 million; and complementary works and operational adjustments at Chuquicamata Underground Phase 1 to US$1.697 million. In October 2023, Codelco’s chairman reported that Chuquicamata Underground’s total cost had reached US$6.200 million, including a 53% overrun, while the Andina Transfer project had a projected capex of US$1.700 million, with a 21% overrun.
The Potential of Strategic Partnerships
Despite the El Teniente suspension and its expected, albeit temporary, impacts, some industry observers highlight that recent cooperation agreements with Anglo American, BHP, and Rio Tinto could help offset the incident’s effects and position Codelco positively for the future.
In February, Codelco and Anglo American signed a memorandum of understanding to jointly develop the Andina-Los Bronces Mining District. This is expected to yield an average annual production increase of 120,000 tonnes over 21 years, generating at least US$5.000 million in pre-tax value.
In May, Codelco announced a partnership with BHP for the exploration and potential development of the Anillo project in Chile’s Antofagasta Region. That same month, Codelco and Rio Tinto announced an agreement for lithium development at the Maricunga Salt Flat and to accelerate the potential development of the Nuevo Cobre mining districtin the Atacama Region.
In parallel, Codelco and SQM teams continue working to meet the conditions for the creation of a joint venture to extract lithium from the Atacama Salt Flat.
Additionally, the company expects to receive an extra 25,000–30,000 tonnes this year from its 10% stake in Quebrada Blanca, acquired in 2024.
Still, the consensus remains that production rates will decline, particularly at El Teniente, making a reassessment of productivity targets inevitable. The pressing question is: by how much?
Source: Diario Financiero