Chile’s state-owned miner Codelco has dismissed eight people, including senior executives, after investigations into over-reported copper production uncovered new evidence of irregularities, deepening the fallout from an accounting scandal at the copper giant.
The dismissals span the Chuquicamata, Ministro Hales and Salvador divisions as well as the Santiago headquarters, the company said. They include Salvador general manager Patricio Viveros and managers responsible for mineral resources and development at the three divisions.
“Transparency and integrity are completely non-negotiable principles in our state-owned companies,” Chilean Mining Minister Daniel Mas said in a statement published in his X account, backing the dismissals.
The widening production-accounting problems risk eroding confidence in Codelco among customers and bondholders as the miner grapples with project setbacks, declining ore quality, rising costs and record-high debt.
The discrepancies suggest Chile’s copper production has been overstated, although they are unlikely to affect global copper markets, which respond to actual supply and demand, Juan Ignacio Guzmán, CEO of GEM Mining Consulting, told MINING.COM.
“Naturally, a company that lacks credibility could face a very serious impact on its borrowing costs,” Guzmán said.
He added that financial markets generally continue to trust Codelco and that management’s efforts to disclose the irregularities and strengthen reporting controls are steps in the right direction.
The findings also raise questions about internal oversight and the reliability of output figures used to measure operational performance.
“This is a serious issue because it reveals weaknesses in control, traceability and operational validation,” Juan Carlos Guajardo, executive director of Plusmining consultancy, told MINING.COM.
Discrepancies
The investigation began after an internal audit found approximately 20,000 tonnes of copper had been included in December 2025 production records without meeting the requirements to qualify as actual output.
The review initially focused on Chuquicamata, where auditors identified inconsistencies in the validation of material classified as finished products. The findings raised concerns about whether production targets had been improperly achieved and how the discrepancies may have affected performance-based bonuses.
A separate audit subsequently identified roughly 27,000 tonnes of copper, equivalent to about 2% of Codelco’s reported own-mine production in 2025, that had been improperly booked as commercially ready material. The findings prompted an earlier executive dismissal, disciplinary measures against other employees and a recalculation of output-linked incentives.
Codelco said the irregularities did not require changes to its audited 2025 financial statements.
In May, Chile’s National Public Prosecutor’s Office appointed Aquiles Cubillos, a regional prosecutor, to lead a criminal investigation following complaints filed by Codelco and Congressman Jaime Mulet.
The case expanded in early October when evidence emerged that the same copper may have been counted as production by more than one division, potentially inflating reported output at Ministro Hales and Salvador during 2024 and 2025.
Codelco hired Ernst & Young to conduct a targeted investigation into the scale of the discrepancies, identify those potentially responsible and assess their economic impact. KPMG is reviewing production records across the company, while Chile’s Comptroller General is conducting a separate audit.
The latest dismissals also include Salvador’s smelter operations superintendent, mineral resources and development managers at Codelco’s corporate offices, the head of quality and metallurgical balance at Ministro Hales, and the head of metallurgical valuation in the corporate accounting department.
Codelco separately announced that Felipe Lagno will take over as Salvador’s general manager, replacing Viveros.
Leadership under pressure
The upheaval comes less than a week before an extraordinary shareholders’ meeting scheduled for Nov. 5 at the request of Mas and Finance Minister Jorge Quiroz to examine inconsistencies in Codelco’s production figures.
The meeting will increase scrutiny of the company’s reporting controls and management oversight as investigators work to determine how the irregularities occurred and whether they extend beyond the divisions already implicated.
New chairman Bernardo Fontaine and chief executive officer Jorge Gómez are shifting the focus toward consolidating existing operations and production levels under a value-over-volume approach, moving away from the growth targets pursued by the previous administration.
The strategy comes as declining ore grades and delays at major projects complicate efforts to sustain production, while mounting debt constrains the company’s ability to finance improvements and expansions.
The final conclusions of the external audits remain pending, leaving the full extent of the accounting discrepancies and any potential financial or criminal liabilities unresolved.
Codelco said the latest dismissals do not preclude further disciplinary measures or legal action as investigations continue.
Source: https://www.mining.com/codelco-accounting-scandal-claims-eight-more-employees/
