Codelco reports new overproduction evidence to prosecutor, orders fresh audit
The world's largest copper producer says preliminary findings point to possible duplications in production accounting and inventory discrepancies for 2024 and 2025
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Codelco says it is investigating new evidence of overproduction spanning 2024 and 2025. The company's board has been briefed on preliminary findings related to possible duplications in production accounting and inventory discrepancies.
Codelco has delivered the findings to the public prosecutor's office and commissioned a new independent external audit to establish the scale of the discrepancy, who is responsible, and the potential economic effects.
The company has been through this before. An audit in May 2026 found that Codelco had overstated its 2025 output by 26,875 tonnes, about 2% of annual production and worth roughly $386 million at current prices, according to Rio Times Online. Mining.com reported that the overstatement involved 20,000 tonnes from the Chuquicamata division and 6,875 tonnes from Ministro Hales, material that should have been logged as work-in-process rather than finished output. Codelco dismissed one executive and disciplined eight others over that episode, Mining.com reported, and Chile's public prosecutor's office appointed regional prosecutor Aquiles Cubillos to lead a criminal case described as 'fraudulent over-estimation' of 2025 production, according to Rio Times Online. That case remains open, Rio Times Online reported, alongside a separate investigation into a fatal accident at the El Teniente mine. Codelco's own output fell 11% to 564,000 tonnes in the first half of 2026, Rio Times Online reported, and chief executive Fontaine has acknowledged the company's 1.34 million tonne target for the year will be hard to reach.
Accounting irregularities at the world's largest copper producer raise questions about the reliability of reported output just as global supply forecasts lean on Chilean production to meet demand. A formal referral to prosecutors and a fresh external audit signal that Codelco sees enough substance in the gaps to warrant outside scrutiny rather than an internal fix. Until the audit quantifies the discrepancy, traders face uncertainty over whether recent supply figures overstated actual mined copper, a gap that could tighten the physical market if revised downward. The scope of any revision, and whether it touches contracted shipments, is still the open question.