Codelco Appoints New CEO to Revitalize Chile Copper Mines
Chilean mining company Codelco has appointed Nelson Pizarro as its new CEO to spearhead its $25 billion pursuit of restoring the state-owned company. Pizarro will take over reigns as chief executive officer effective September 1.
After ousting previous CEO Thomas Keller in June, Codelco sought a candidate to oversee development of two of the world’s largest underground mines. Pizarro, who once ran Codelco’s Andina and Chuquicamata mines, will be asked to lead the company in resurrecting Codelco’s ageing mines and diminishing ore grades along with carrying out the biggest investment plan in Codelco’s history.
"The challenges of Codelco are so big and of such magnitude that probably for those conditions Nelson Pizarro is the right person at the moment," said Juan Carlos Guajardo, head of mining think tank CESCO.
Pizarro, who has over 50 years experience in the industry, recently developed the $4.2 billion Caserones copper mines in the Atacama Desert for Japan’s Pan Pacific Copper Co.
Codelco is looking to revitalize it operations while maintaining profits from its two open-pit copper mines. The company is looking to extend operations underground at its Chuquicamata mine as well as turning the world’s largest underground mine, El Teniente, into an open-pit operation.
In addition to transforming operations, Pizarro will be asked to deal with the idiosyncrasies of running a state-run company.
Chilean President Michelle Bachelet is set to announce a plan for Codelco that will allocate funds to carry out investments the company needs to avoid losing its 40 year long ranking as the world’s top-ranked copper producer.
Copper currently accounts for 60 percent of Chile’s exports and 15 percent of gross domestic product.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.