Miscalculation in production shakes the world's copper giant
· UPIMay 26 (UPI) -- Codelco, Chile's state-owned mining company and the world's largest copper producer, is facing mounting scrutiny after discovering an overestimation of more than 27,000 metric tons in its production figures, triggering executive departures, a criminal complaint and tensions with labor unions.
Following an internal audit, Codelco acknowledged that its previously reported 2025 production figure of 1,334,445 metric tons of fine copper was inaccurate because it included 26,875 metric tons produced at the beginning of 2026. After the adjustment, the company's reported output fell by 2%.
As a result, more than 6,000 Codelco workers may be required to return part of the production bonuses they received after meeting company targets. The bonuses are estimated at more than $14 million.
The measure sparked opposition from labor unions, which warned they could stage protests if the repayment plan moves forward.
"We workers have not pocketed a single peso that we did not deserve," the No. 3 union of Codelco's Chuquicamata division said, according to Chilean broadcaster Biobio.cl. "We will take every action necessary to protect ourselves and prove that we do not owe anyone a single peso."
Manuel Viera, president of the Chilean Mining Chamber, told UPI the controversy damages Codelco's credibility with markets, the Chilean state and commercial partners.
The Chilean miner mainly supplies smelters and industrial clients in Asia. About 38% of its production is exported to China, while 21% goes to North and South America.
"When a company that is 100% owned by the Chilean state delivers figures that later need correction, it weakens the perception of Chile as a predictable and rigorous mining jurisdiction," Viera said.
He added that long-term buyers such as smelters, manufacturers and international traders could begin demanding independent verification of inventories, production volumes and quality standards before renewing contracts.
Juan Ortiz, senior economist at the Economic Context Observatory of Diego Portales University, agreed that although the issue does not affect financial statements or copper deliveries, it exposes weaknesses in oversight.
"It shows deficiencies in the company's internal and external auditing systems and highlights limitations in corporate governance," Ortiz told UPI.
Manuel Reyes, a mining engineering professor at Andrés Bello University, said global buyers are likely to interpret the issue as a severe internal control failure rather than a short-term disruption in copper availability.
"The mineral remains in the production pipeline, so supply continuity for the global energy transition is not at risk," Reyes said.
Still, analysts warned the controversy could weaken political support for Codelco and revive calls for privatization.
"This weakens the state company politically against sectors that have historically used operational inefficiencies to justify privatization," Reyes said. "That could complicate approval of public funding for investment and maintenance of strategic projects."
Ortiz said Codelco could eventually follow the path of other major state-controlled commodity companies such as Ecopetrol in Colombia or Petrobras in Brazil.
"For example, the company could issue shares representing a fraction of its assets, which would strengthen external auditing standards and provide new capital given its high debt levels," he said.
According to the Global Copper Market Report, Codelco ranked among the world's top copper producers in February alongside Freeport-McMoRan and BHP, and controls about 6% of global copper reserves.