Chilean State miner Codelco disclosed a 42,100-tonne copper production overstatement Thursday, the same day a tailings spill halted processing at its Andina operation.
The miner is assessing a potential inventory adjustment of $120 million to $140 million (C$168 million to C$196 million), Chairman Bernardo Fontaine told an extraordinary shareholders’ meeting. The production findings cover 2024 and 2025 and remain preliminary while audits continue.
“For too long, the discussion at Codelco was excessively focused on how many tonnes were produced,” Fontaine said in a Spanish-language statement. “But it’s not about producing for its own sake.”
The accounting failures and spill investigation confront management with tests of both its reporting and environmental safeguards as it works to reverse declining output and rising debt. Fontaine expects copper production to finish slightly above 1.2 million tonnes this year and average about 1.3 million tonnes annually over the next four years, Bloomberg reported.
Duplicate reports
The company’s written account puts the production overstatement at 24,000 tonnes in 2024 and a net 18,100 tonnes last year. Duplicate records also inflated copper inventories by an estimated 15,200 tonnes, it said.
The irregularities included counting material before it qualified as finished production and recording the same copper at more than one division. They also affected employee incentive payments, which Codelco is calculating and seeking to recover, Fontaine said, according to Chilean newspaper Emol.
KPMG is reviewing production records across all divisions for both years, while EY is conducting a forensic investigation into possible duplicate entries. Codelco dismissed eight executives and professionals on Oct. 29 across Chuquicamata, Ministro Hales, Salvador and its corporate offices.
Financial strain
The investigations come as Fontaine reassesses the returns from Codelco’s spending. The company invested $32 billion over the past eight years without reversing its production decline, he told the meeting, according to Emol.
Transfers to the Chilean government totalled $7 billion over the past four years, 43% below the preceding four-year period despite copper prices rising 30%, Fontaine said. Debt increased 50% to finance those contributions, he added.
Codelco is preparing a recovery plan focused on safer, more profitable production, tighter controls and greater discipline in allocating capital. It also intends to pursue growth through public-private partnerships.
Spill inquiry
At Andina, in the Valparaíso region, Codelco stopped the concentrator and tailings transport after detecting an obstruction in a tailings channel early Thursday.
The company subsequently estimated that between one and five cubic metres of tailings reached the Blanco River. It attributed the blockage to an object falling into the channel following a snow slide during thaw conditions, La Tercera reported.
Codelco said testing of the Blanco and Aconcagua rivers found no significant changes in the parameters examined, including pH, conductivity and temperature. The findings don’t establish the spill’s final environmental impact.
Water utility Esval closed its surface-water intake from the Aconcagua as a precaution and activated underground sources and backup systems. It said drinking-water service in Los Andes continued normally.
Chile’s Superintendency of the Environment has opened an investigation and sent inspectors to assess the spill and cleanup.
The regulator gave Codelco two business days to provide technical records, including the volume spilled, water monitoring and emergency measures. A consolidated report on the cause, environmental effects and steps to prevent a recurrence is due next week.
Source: www.northernminer.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
