“People are worried about what will happen with their jobs,” says a contractor, as ore production has been halted for over a week.
By Pablo San Martín
The tragic accident that claimed the lives of six workers and injured nine others forced the suspension of nearly all operations at El Teniente. Beyond the human tragedy, the situation carries serious economic implications: experts estimate that each day of downtime costs Codelco approximately US$9.5 million in lost revenue
“In a week of suspension, the impact, in production terms, amounts to 7,000 tonnes and roughly US$67 million in lost revenue,” explains Álvaro Merino, Executive Director of Núcleo Minero, in an interview with El Mercurio. The losses could be significant enough to have a noticeable effect on Chile’s Gross Domestic Product (GDP), as well as on the economy of the O’Higgins Region, where El Teniente is a primary economic driver.
El Teniente’s National Role
According to Juan Carlos Guajardo, Executive Director of Plusmining, El Teniente produces approximately 350,000 tonnes annually and represents 23.3% of the output of the state-owned copper producer led by Chairman Máximo Pacheco.
“At the national level,” Guajardo notes, “considering a total national production of around 5.4 million tonnes, El Teniente accounts for roughly 6.5% of Chile’s copper output.” Based on this, its direct impact on Chile’s GDP would be approximately 0.6%, to which indirect effects must be added—such as impacts on suppliers, employment, and induced consumption—leading Guajardo to conclude that the total economic effect is likely to be higher.
Patricio Faúndez, Practice Leader for Economics at GEM Mining Consulting, offers similar figures with slight variations: “El Teniente produces about 27% of Codelco’s fine copper and represents between 6% and 7% of Chile’s total copper production.”
He further emphasizes the strategic nature of the operation: “This is a key asset within the country’s primary economic sector—mining—which, depending on copper prices, can contribute between 10% and 15% of national GDP directly.”
Similarly, Alejandro Weber, former Undersecretary of Finance and Dean of Economics, Business, and Government at Universidad San Sebastián (USS), notes: “Codelco’s fiscal contribution in 2024 was US$1.450 million, of which approximately US$360 million came from El Teniente.”
Regional Significance in O’Higgins
Last week’s tragedy deeply affected the entire O’Higgins Region. “Everyone knows someone who works at El Teniente,” says a resident of Rancagua. The mine is deeply intertwined with the region’s identity.
Faúndez estimates that El Teniente directly accounts for up to 16% of the O’Higgins Region’s GDP, adding that “each week of shutdown at the mine represents a direct loss equivalent to roughly 0.3% of regional GDP.”
Guajardo notes that the operation generates direct and indirect employment, drives demand for services, transportation, infrastructure, commerce, and contributes significantly to tax revenue. “It could represent between 15% and 25% of the regional GDP,” he affirms.
Incertidumbre O’Higgins
There is still no clear timeline for El Teniente to resume full operations.
“Everyone is affected. Everyone is worried, with the uncertainty about what will happen with the mine,” says a contractor. “In general, people are anxious about what will happen with their jobs,” he adds, explaining that at present, the company is gathering the documentation requested by Sernageomin and the investigative police (PDI). “For now, the investigation is ongoing. When operations will resume is still unknown,” he notes.
However, on Friday night the first step toward resuming work was announced, as Sernageomin authorized El Teniente to begin operating, albeit partially. Despite this, the timeline for implementation remains uncertain, as approval from the Labour Directorate must be obtained first.
Source: El Mercurio