Codelco Copper Profits Soar Despite Output Decline

Chile's state-owned miner Codelco reported a significant rebound in profits despite a decline in copper output and increased costs. The company's realized copper price rose to 653.2 cents per pound from 461.7 cents a year earlier, contributing to a first-half pre-tax profit of $1.97 billion, up from $429 million.

The increase in prices masked operating strain, with production falling 11% to 564,000 metric tons due to restrictions at El Teniente, lower output at Chuquicamata, and weaker ore grades at Ministro Hales. As a result, Codelco's direct cash cost rose 7% to 231.6 cents per pound.

Management prioritizes restoring productivity, but the company did not reiterate its 2026 output forecast, which has been under review due to investment priorities and debt burden. This omission comes at an awkward time, as Codelco needs internally generated cash to fund mine upgrades while keeping borrowing in check.