Codelco abandons 2026 copper production target as setbacks mount

Chile's state-owned copper miner Codelco is effectively abandoning its plan to produce 1.34 million metric tons of copper this year, shifting its focus toward profitability and debt reduction as operational setbacks continue to mount, Bloomberg reported on Wednesday.bloomberg

The retreat marks another difficult chapter for the company, which lost its title as the world's largest copper supplier to BHP Group ↘ 3.21% last year and has now failed to meet its own production projections for seven consecutive years.mining

A Strategy Reset

Codelco had set 2026 production guidance of 1.33 to 1.36 million metric tons in April, a modest increase from its 2025 output of roughly 1.33 million tons. Now, the miner expects to fall short of even that conservative target, according to a person familiar with the matter cited by Bloomberg.codelco+1

Chairman Bernardo Fontaine signaled the shift in late July, telling Radio Infinita that "for seven years, Codelco hasn't met its projections — and this year is no exception". The company is also walking away from its longer-term ambition of reaching 1.7 million tons annually, a goal Fontaine called no longer realistic. Instead, Codelco plans to present a recovery strategy in October or November focused on improving returns rather than maximizing output.industrialinfo+1

El Teniente Setback Deepens Supply Concerns

Compounding the production shortfall is the suspension of development at the Andes Norte project, part of Codelco's flagship El Teniente mine — the world's largest underground copper operation. On August 4, Codelco announced it had paused all construction after six months of data collection revealed seismic risks at greater depths than previously understood.mining+1

The decision follows a collapse at El Teniente in July 2025 that killed six workers. Codelco said the available evidence pointed to "an emerging risk associated with the greater depth of the Andes Norte project" and that enhanced monitoring and instrumentation were needed before work could resume. Production from the stalled project has been pushed to 2029.x+1

Debt and Market Implications

Codelco's gross financial debt stood at $27.4 billion as of March 2026, up 14.1% year-over-year, with a net debt-to-EBITDA ratio of 3.8 times — far above the global mining industry average of 0.7 times. The company has suspended approvals for new projects while it reassesses capital spending.codelco+2

For copper markets, Codelco's pullback reinforces a tightening supply outlook. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.52% recently raised its 2026 refined copper deficit forecast outside the United States to 640,000 tonnes, while J.P. Morgan projects a 330,000-tonne global deficit. With recent data showing Codelco's production fell 4.8% year-on-year in June, the world's second-largest copper producer appears unlikely to ease those constraints anytime soon.investmentguruindia+1