Experts believe the measure is “fantastic,” although it was “probably inevitable” given the state-owned company’s situation.
Miners’ Day was the occasion chosen by President José Antonio Kast and his team to announce the full capitalization of Codelco’s profits. The announcement was made at the Andina Division in Los Andes, where the state-owned company has been implementing a productive integration with neighboring Los Bronces aimed at increasing copper production.
“We have to recover that national pride that is Codelco (…) Many times, the seriousness and depth of the mining challenge facing our nation are not fully appreciated,” the President said.
Later, Economy and Mining Minister Daniel Mas joined via video link from the Tarapacá Region, delivering the news through a screen set up at Andina: “I want to announce that today we are marking a historic and unprecedented milestone in the trajectory of this important Chilean company. President José Antonio Kast has made the fiscal, financial and political decision to authorize Codelco to capitalize 100% of the profits corresponding to the 2025 financial year,” he said. This represents a direct injection of more than US$2.4 billion, “which will remain entirely within the company.” According to the minister, the objective is “fundamentally to prevent the response to major production challenges from being to continue increasing debt.”
Codelco clarified that the US$2.422 billion “includes the accounting valuation of the Corporation’s stake in Novandino Litio.”
“I want to thank the President of the Republic and his government for supporting this initiative, which we promoted from the Board of Directors,” said Bernardo Fontaine, chairman of Codelco, at the ceremony at Andina.
The decision comes at a time when nominal copper prices are at their highest levels on record. Yesterday, for example, copper traded at US$6.481 per pound.
Until now, the discussion surrounding Codelco had focused on production stagnating at around 1.3 million tonnes and on a series of decisions that pushed its debt to a peak of approximately US$25 billion.
Previous decisions
In the past, Codelco has been capitalized through two mechanisms: a policy allowing the state-owned company to retain part of its profits, or extraordinary contributions from the Treasury, similar to a capital increase.
In 2022, Gabriel Boric’s government established that 30% of Codelco’s profits would be reinvested for the 2021–2024 financial years. In 2022, this meant that the state-owned company withheld US$583 million in profits that would otherwise have been transferred to the Treasury, after recording earnings of US$1.943 billion the previous year. In 2025, the capitalization amounted to US$72 million due to lower profits.
What occurred under the previous administration was unprecedented in terms of Codelco’s dividend policy. Until then, the copper producer had transferred all of its profits to the Treasury.
In 2014, during Michelle Bachelet’s second administration, Law 20,790 was approved, allowing extraordinary capital contributions to Codelco of up to US$3 billion from public funds between the year the law was enacted and 2019. These transfers were completed during Sebastián Piñera’s second administration. “The Executive authorized a US$1 billion contribution to Codelco under Law 20,790 of 2014, which established a series of contributions totaling up to US$3 billion,” the Ministry of Finance reported in February 2019, when Felipe Larraín headed the ministry. On December 26, 2019, Codelco received US$600 million as an extraordinary capital contribution, followed by the transfer of the remaining US$400 million.
A similar case occurred in 2013. According to a July 2015 report by the Budget Office (Dipres), “the capitalization of US$2 billion in retained earnings, authorized in 2013, did not translate into additional tangible resources for the company, since it corresponded to an accounting profit resulting from the acquisition of a 24.5% stake in Anglo American Sur S.A., which will generate actual resources for the company when the assets are sold.”
In the first quarter of 2026, Codelco recorded profits of US$306 million, well above the US$61 million posted in the same period of 2025. The increase in profits was mainly due to higher copper prices. During the first three months of 2025, the average copper price was US$4.23 per pound. During the same period this year, it climbed to US$5.82 per pound.
Production, however, fell by 8%. In the first quarter of 2025, production totaled 324,000 tonnes of copper, including production attributable to Codelco through minority interests, while in the first three months of this year it totaled 299,600 tonnes.
“Probably inevitable” measure
Experts welcomed the measure. “The decision to capitalize 100% of Codelco’s profits is a step in the right direction,” said Juan Carlos Guajardo, executive director of Plusmining, although he added that it was “probably inevitable.”
“For many years, the State simultaneously required Codelco to finance major investments, maintain a high level of transfers to the Treasury, and sustain its production. When internally generated cash flow was insufficient, a significant part of that equation ended up being resolved through increased borrowing. Today, that model is clearly showing its limits,” he said.
Mining lawyer Cristián Quinzio described the measure as “fantastic.” However, he hopes that “in the future, some rule will be established requiring Codelco, as with any corporation, to distribute part of its profits to its owners and capitalize the remainder.” He also believes that the state-owned company’s tax burden should be reduced, as it is significantly higher than that of a privately owned mining company.
Source: El Mercurio