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CESCO Believe Codelco Could Be Dragged Into Insolvency

CHILE
  • Reuters reported on Thursday that CESCO, Chile’s Centre for Copper and Mining Studies, believes Codelco is at risk of insolvency due to rising costs and a growing debt pile stemming from projects that missed targets.
    • In June, Codelco’s CEO resigned over “complexities” around the business. He will effectively leave the company at the end of August. Despite Codelco’s copper production standing at a 25-year low, it still represents 28% of Chile’s output. Chile's future prosperity is tied to Codelco's fortunes, CESCO said.
  • Subsequently, headlines have recently been filtering through on Bloomberg from Codelco’s CEO:
    • 2023 probably will be low point of copper output
    • Codelco has to replace 50% of copper output over next decade
    • Codelco playing catchup after past underinvestment
    • Codelco would become `irrelevant' without current projects
    • Codelco has reached a point of no return in developing projects
    • Codelco sees copper production recovering coming few years

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