Codelco accounting scandal: risk, controls and production lens for mine teams
Reviewed by Tom Sullivan

First reported on MINING.com
30 Second Briefing
Codelco has dismissed eight more staff, including Salvador general manager Patricio Viveros and metallurgical and mineral resources managers at Chuquicamata, Ministro Hales, Salvador and Santiago, after audits found about 47,000 tonnes of copper had been improperly booked as commercially ready material in 2024–2025. Internal and external reviews by Ernst & Young, KPMG and Chile’s Comptroller General are probing duplicated production between divisions, weaknesses in control, traceability and metallurgical balance validation, and potential impacts on output-linked bonuses. Consultants warn that while global copper supply figures are largely unaffected, Codelco’s borrowing costs and credibility with customers and bondholders are at risk.
Technical Brief
- Internal audit first detected ~20,000 t of copper wrongly booked in December 2025 production.
- Subsequent audit found a further ~27,000 t misclassified, about 2% of 2025 own-mine output.
- Misstated volumes triggered recalculation of output-linked incentives and prior disciplinary measures before the latest dismissals.
- Quality and metallurgical balance head at Ministro Hales and corporate metallurgical valuation lead were specifically removed.
- Chile’s National Public Prosecutor appointed Aquiles Cubillos in May to lead a criminal investigation.
- Parallel reviews by Ernst & Young, KPMG and Chile’s Comptroller General are interrogating production records and control systems.
- Extraordinary shareholders’ meeting on 5 November will scrutinise reporting controls, oversight structures and division-level validation processes.
Our Take
Codelco’s recent $1.4 billion-equivalent World Bank/MIGA-backed loan guarantees suggest lenders still view the Chilean copper major as bankable despite this accounting issue, but sustained governance concerns at assets like Chuquicamata and Ministro Hales could tighten future covenant and reporting requirements.
The same month this accounting problem surfaced, Codelco was also dealing with a fatality at Radomiro Tomic, so safety- and governance-tagged incidents now span both operational risk and financial controls in Chile, which is likely to sharpen scrutiny from Sernageomin and the Comptroller General across multiple divisions.
In our database, Codelco dominates Latin America copper coverage and is simultaneously expanding through the Anillo exploration deal with BHP and automation trials at El Teniente, meaning any loss of confidence in reported production figures could have outsized influence on how counterparties price and structure new technical collaborations.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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