Codelco Output Scandal Puts State Oversight on Trial

Codelco acknowledged that reported copper output was overstated by about 42,100 tonnes across 2024 and 2025, putting the state-owned company’s board and the government that represents its shareholder under scrutiny. The inflated numbers also affected performance bonuses for a group of workers and executives. Their final amounts haven’t been set.

Who Holds the Levers

Daniel Mas, the minister holding both the economy and mining portfolios, said the government is preparing to review Chile’s mining institutions. The review could lead to changes in Codelco’s board-governance law, or even a constitutional change, if the review recommends it. Mas said no board change was planned in advance.

The Chilean state is Codelco’s shareholder. Finance Minister Jorge Quiroz and Mas, together representing the President of Chile, requested an extraordinary shareholders’ meeting on Thursday, Nov. 5, 2026. The meeting backed the board’s investigation and asked it to keep an open dialogue with shareholders about possible governance changes. The state called the meeting, set its terms, and remains the company’s owner.

Mas said the government would stay closer to Codelco than previous governments. Ministers can’t sit on the board, he said, but they can call another extraordinary meeting whenever they have doubts. That leaves formal board membership off-limits to ministers while preserving a direct channel for government intervention.

Mas told a Chilean business newspaper that the mining system must modernize. He named Codelco, Sernageomin, the national geology and mining service, and Cochilco, the state copper commission. He questioned whether Cochilco acts as a watchdog or an adviser, and whether Sernageomin is strong enough to stand up to Codelco.

A cross-sector working group of eight or nine people is expected to gather outside experience, with members to be named by the end of 2026. The government is considering institutional changes, but the account describes no community-led process or grassroots response. The proposed route runs through ministers, a working group, shareholders, and possible changes to the law or constitution.

The Cost of the Numbers

Bernardo Fontaine, Codelco’s board chair, told the meeting that reported production was falsely raised by about 24,000 tonnes in 2024 and by a net 18,100 tonnes in 2025. He said the figures could still change.

Codelco said duplicated output inflated inventories by 15,200 tonnes of pure copper content and caused a preliminary accounting impact of between $120 million and $140 million. KPMG is checking output across all divisions for 2024 and 2025. EY is conducting a forensic audit into the duplications and who was responsible.

The overcount also affected performance bonuses for a group of workers and executives. The company hasn’t set final amounts. The figures used to measure production therefore reached beyond boardroom accounting: they shaped bonuses, though the source doesn’t specify how much any worker or executive received.

Who Gets the Profits

Mas said Codelco’s debt “is payable” and that accurate production figures would show how much the company can invest and pay the state. He doesn’t plan to change Codelco’s tax regime, but wants longer-term agreements on whether profits stay in the company or are withdrawn.

The government let Codelco keep 100% of the previous year’s profit, which Mas valued at roughly $2.5 billion. Codelco’s long-term strategic plan, first due in the last quarter of 2026, should now arrive in early 2027. Codelco is one of the world’s largest copper producers, and its figures contribute to supply data used by American manufacturers and traders. The board’s investigation continues; the people affected by the bonus calculations await final figures.