A new report commissioned by Codelco's new board, led by Bernardo Fontaine, reveals a sustained deterioration of the company's key financial indicators between 2022 and 2025, a period under Máximo Pacheco's presidency. Despite a 30% increase in the average copper price (from $3.18 to $4.13 per pound), Codelco's operating cash flow decreased by more than $4 billion, from $24.685 billion to $20.375 billion. This decline is attributed to lower production, investments that failed to offset this effect, and a 42% rise in expenses, meaning that the company's operational cash flow fell from 40% to 27% of its income.
The report indicates that Codelco's contributions to the Chilean state between 2022 and 2025 totaled $7.039 billion, a 43% drop from the $12.369 billion contributed in the previous four years (2018-2021). Concurrently, the state-owned miner increased its debt by $8.734 billion in the same period, leading to a 50% jump in gross debt from $17.594 billion in 2021 to $26.328 billion in 2025. This significant increase underlines a concern that Codelco's contributions to the treasury are being financed by debt.
The deterioration in Codelco's financial performance is further highlighted by a 16% decrease in average annual production during 2022-2025 compared to the prior four years, despite nearly $32 billion invested between 2018 and 2025. Expenses per ton of copper rose 82%, from $5,765 to $10,476, largely offsetting the benefit of higher copper prices. The report concludes that the company essentially consumed all its generated cash on investments and interest payments, necessitating a re-evaluation of its strategy to improve cash generation, productivity, and investment discipline. The average annual negative cash flow from operations, investments, interest, and state contributions was about $2.7 billion over the last three years.
