Chile’s state-owned mining company (Codelco) has reported (🇨🇱) a 65% drop in profit this year.
Chile has the world’s largest known copper reserves, and Codelco alone produces around 6% of the world’s total.
So what’s behind the company’s massive profit drop? Codelco has struggled with misfired projects, plus broader industry challenges around ageing mines, deteriorating ore grades, and stretched supply chains.
Intrigue’s take: This is tough news for Chile, and tough news for the world.
Chile needs revenue to help address domestic challenges such as its recent unrest. But its mining union is warning of strikes if Codelco looks to more job cuts to reduce costs. And markets are flagging the possibility of insolvency if Codelco relies too much on debt to fix its problems instead.
As for the world, it needs Chile to produce more copper and lithium, not less, for the batteries, solar panels and other tech driving the energy transition.