Codelco chairman calls claims of insolvency risk 'nonsense'

15th September 2023 By: Reuters

The chairman of Chilean state-owned Codelco, the world's largest copper producer, told lawmakers on Wednesday that the company was "financially solid," rejecting an industry body report that had said it was at risk of insolvency.

"Do any of you believe that Codelco is truly at risk of insolvency? I mean, that seems like nonsense to me," chairman Maximo Pacheco said.

Pacheco was responding to a report last month from copper studies center CESCO that said if production promises are not met, high levels of debt could lead to insolvency.

"It is not appropriate for us to say that Codelco is a company that has financial problems or balance sheet problems," Pacheco said. "In a year when production fell and we are behind schedule with projects, Codelco's EBITDA will exceed $5 billion."

Beset by operational problems and delays in its key upgrade projects, Codelco reported its lowest levels of production in a quarter century in 2022. In July, the company lowered its production estimate for this year to 1.31-1.35 million metric tons of copper, down from 1.35-1.45 million previously forecast.

Meanwhile, its debt has risen to around $20 billion.