Production is at its worst level in years, debt is at its highest, audits are underway, union challenges exist, organizational complexities are emerging, and there is a focus on non-essential assets.
Jorge Gómez takes over the executive presidency of Codelco at the company’s worst production moment in more than a decade. In the first quarter of 2026, the company produced 271,600 metric tons of copper, its worst quarterly record in at least 13 years, according to data from Plusmining. What challenges will this mining civil engineer face when he takes over management on July 13, replacing Rubén Alvarado?
1. Production
According to figures from Cochilco, the company has failed to meet its own copper production budget for seven consecutive years, between 2019 and 2025.
“In a mining company, the production budget is the foundation upon which costs, investments, expected surpluses, financial commitments, and fiscal expectations are organized. When that gap repeats for so many years, it ceases to be a temporary deviation and becomes a sign of structural deterioration,” states Juan Carlos Guajardo, executive director of Plusmining.
2. Structural projects
Juan Ignacio Guzmán, general manager of GEM, is blunt: “Several chief executive officers have already come and gone without achieving concrete changes in project compliance and improvement. This is an issue that requires additional, out-of-the-box thinking.” Guajardo specifies that the structural projects face massive delays and their investments have practically doubled.
Marcos Lima, former chief executive officer of Codelco and academic at the Universidad Católica, considers that one of the causes of lower production is that structural projects are delayed and have not compensated for the decline in deposits such as the Chuquicamata open pit, Radomiro Tomic, Gaby, and Salvador. The most difficult case is Chuquicamata Subterráneo (Underground), which is far from reaching its design capacity, and El Teniente, with the additional complication of rockbursts (which caused a fatal accident in 2025). Lima mentions El Abra as an option for growth but warns that it requires a large investment and a timeframe of several years.
3. Debt
Codelco faces a debt exceeding US$25 billion. Álvaro Merino Lacoste, executive director of Núcleo Minero, points out that cost control, process optimization, and designing pathways to reduce indebtedness are key aspects. Guzmán proposes a possible formula: a plan that allows Codelco to capitalize part of its surpluses to finance investments, conditioned on meeting economic indicators that incentivize a solid contribution to the State.
In practice, because Codelco is state-owned, it has a State guarantee. Emanuelle Santos, market analyst at XTB, recalls that the company maintains market access—January’s bond issuance saw strong institutional demand and competitive spreads—but warns that this does not eliminate the underlying problem. Lima adds another angle: “Gómez will have to define whether the company will continue to leverage its status as a state-owned enterprise of an investment-grade country to raise resources in international markets, or if it will return to the path of partnering with third parties, also considering the investment commitments derived from associations such as El Abra, SQM, and Rio Tinto Litio.”
4. Credibility of the figures
The production understatement in December 2025 ended in an internal audit, which is currently underway. Guajardo points out that Cochilco documented that between 2020 and 2025, there were production control audits in several divisions with risk levels classified as high or extreme. “The underlying problem is not just whether there was a classification error in a given month, but whether the criteria used to report production have been sufficiently consistent, traceable, and comparable over time,” he states.
Lima adds the case of El Teniente (the accident) as a second blow to credibility and asks whether, in addition to the internal audit already underway, the company will hire third parties to certify that no other irregular situations exist. Santos adds another dimension: “Stabilizing tonnage is not enough if the market, the government, and the workers do not trust the quality of the information. Production is a financial, reputational, and political variable all at the same time,” he says.
5. Operational safety
Production at El Teniente fell 29% annually in March 2026, equivalent to 8,000 fewer tons, associated with the rockburst and permitting issues, according to Plusmining. Guajardo warns that Codelco only reported production losses from the accident for 2025, “but not for this year and the following ones, which seems to be revealing itself strongly now.”
6. Collective bargaining
In 2026, there are 34 collective bargaining processes in large-scale mining, and Codelco faces expiration dates for collective instruments in five unions, two of them at El Teniente. Santos warns that the risk is not just a potential strike, but that the agreements might incorporate permanent cost increases just when the firm most needs to recover its operating margin.
Lima emphasizes that Gómez will face powerful and experienced unions, especially in Chuquicamata, where he will also have to manage the recovery of an improperly paid bonus. The agreement governing relations with contractor companies must also be renewed. The most relevant negotiations are concentrated at El Teniente in November 2026 and Radomiro Tomic in December, according to Guajardo.
7. Internal organization
Guzmán describes an “organizational disorder” and calls for giving “a clear focus and strategy to all divisions, areas, and workers.”
Merino proposes that Codelco transform into a parent company that manages its operating units as a holding company, with the purpose of decentralizing decision-making. He points out that during the last administration, the roles of the chairman of the board and the chief executive officer became confused. The former is responsible for managing relations with the President of the Republic in his capacity as the shareholders’ meeting; the latter is responsible for executing board agreements and directing production, administrative, and financial activities. “I believe that during the last administration, the chairman of the board (Máximo Pacheco) fulfilled both roles,” he states.
Guajardo adds that the challenge will require strong coordination between the board and management to align political leadership, technical capabilities, financial discipline, control standards, operational safety, and project execution.
8. Asset review
Guajardo and Merino agree that Gómez will have to review the portfolio and evaluate divesting from non-strategic assets. Guajardo mentions Codelco’s stakes in Anglo American Sur and El Abra, where Codelco is not the controlling partner, as potential candidates.
Lima offers a nuanced view on this interpretation: “Unlike the 90s, when there were clearly expendable assets like the Tocopilla Thermoelectric Power Plant, I believe that today Codelco does not seem to have assets unrelated to its copper and lithium businesses.
Selling in parts can be a mistake,” he warns, “because a mining company is valued for its production capacity, its reserves, and its future projects.” He proposes hiring independent evaluators to determine whether the separate sale of assets increases or decreases the value of the whole before making any decision.
Fuente: El Mercurio