Codelco Dismisses One Official and Investigates Possible Duplication in Copper Production Figures
Key Facts
Codelco said it dismissed one executive following a May 2026 audit, while it continues a separate investigation into whether the same material was recorded as production by more than one division in 2024 and 2025. The company informed its board on October 6 that it had identified potential discrepancies in production figures covering the two years. The new investigation concerns the Salvador and Ministro Hales divisions, and the impact of the potential duplication on consolidated production and inventory figures has not yet been determined. The company said preliminary findings indicate that these cases may have led to an artificial increase in the divisions’ recorded production. The October statement did not announce any employee dismissals, unlike an earlier account that conflated this investigation with the findings of the May audit.
The May audit concluded that 20,000 metric tons of copper associated with the Chuquicamata division and 6,875 metric tons associated with the Ministro Hales division did not meet the requirements for classification as finished product. Together, the two quantities represented about 2% of Codelco’s reported mine production in 2025. The company said the material required further processing and did not fully meet the conditions set out in its internal rules for finished products. It added that it should have remained recorded as work in progress. The May audit therefore differs from the October investigation: the former addressed the classification of material within 2025 production, while the latter examines the possibility that the same material was recorded in two divisions’ accounts over two years.
In accountability measures related to the May audit, Codelco said the group whose conduct was reviewed included 7 executives and one former official. The company dismissed one executive and reprimanded the other professionals involved. It also said that correcting reported production volumes requires recalculating variable incentives linked to those metrics. The board directed management to recover the necessary amounts in accordance with regulations. The company said a review of the audit findings found no adverse effects requiring changes to its audited financial statements as of December 31, 2025.
Codelco referred the new information to the public prosecutor’s office and commissioned EY to conduct an independent audit to verify potential duplication cases. The assignment includes determining the nature and extent of any duplication and measuring its impact on the production and inventory figures reported by the company. It also covers identifying causes, responsibilities and potential economic effects, including payments linked to variable incentives. In parallel, KPMG will continue its review of production across all Codelco divisions for 2024 and 2025. EY’s specific assignment focuses on potential duplication between Salvador and Ministro Hales during the same period.
In testimony before a parliamentary committee on October 7, Codelco Chairman Bernardo Fontaine said management would address the discrepancies "firmly and transparently." This follows the May audit, which identified management responsibilities and disciplinary measures, while a comprehensive review of the figures and an independent investigation into potential duplicate recording continue. The company has not yet disclosed the extent of any potential duplication or its final impact on production and inventory. The daily copper closing price, according to HG USD data, was 6.5075 on October 23 and then 6.6025 on October 29. KPMG is continuing its review for 2024 and 2025, while EY examines the new findings related to the two divisions.