Codelco: 11% Less Copper, Four Times the Profit in H1 2026

Codelco produced 11% less copper in the first half of 2026 than it did a year earlier. It also delivered a pre-tax profit roughly four times larger.

That tension sits at the centre of the company’s H1 2026 results, released 28 August 2026. As the world’s largest copper producer, Codelco’s output trajectory is not a company-specific footnote; it is a variable in the global copper supply balance. The results reveal a company caught between the reality of ageing assets and an ambitious capital project pipeline that is close to, but not yet at, its inflection point.

The analysis that follows gives you a clear view of which Codelco projects are genuine near-term volume catalysts, which represent long-dated optionality, and where execution risk is most concentrated. It also provides a monitoring framework so you can track whether the recovery case is strengthening or deteriorating before the next full results cycle.

Why three divisions fell sharply while three others gained ground

The aggregate number and what sits beneath it

Codelco’s own copper output in H1 2026 totalled 564,000 metric fine tons (mft), compared with 634,000 mft in the same period of 2025, representing an 11% contraction. When the corporation’s minority stakes in El Abra (49%), Anglo American Sur (20%), and Quebrada Blanca (10%) are included, attributable production came to 619,000 mft, which is 10% below the H1 2025 figure.

A decline of that scale at the world’s largest copper producer demands a closer look at what is driving it, and whether it is uniform or concentrated.

The global copper supply deficit that analysts have tracked across the energy transition build-out means Codelco’s production shortfall is not simply a company-level problem; every tonne lost to safety restrictions, grade deterioration, or delayed ramp-ups tightens a market already running structurally short of primary supply.

The divisional breakdown tells a split story. Three divisions moved sharply lower. Three moved in the opposite direction.

The pattern matters. Deterioration is concentrated in three divisions, not spread across the company. But the causes behind each decline are materially different, and that distinction shapes the recovery timeline:

• Event-driven restriction: Output at El Teniente has been held back by operational continuity measures put in place following the loss of six workers in a fatal accident in July 2025. Well over a year on, those measures remain in force with no confirmed lifting date. The related Andes Norte project was suspended while geomechanical and seismic work is carried out, pushing the revised production start back to 2029.
• Planned transition: The fall at Chuquicamata reflects a planned major maintenance shutdown that ran from April through May 2026, alongside the inherent complexity of converting the operation from open pit to underground extraction. Underground Level 1 continuity infrastructure has now advanced to 94% completion, so this transition phase is nearing its end, though normalised output has not yet been restored.
• Grade deterioration: Ministro Hales is dealing with weaker ore feed grades. Unlike a shutdown or a safety restriction, grade decline is structural rather than recoverable through a single project decision.

An investor who treats the 11% headline decline as a uniform problem is misreading the risk. Two of the three causes have plausible resolution paths. The third does not, at least not within the current project pipeline.

Record price leverage masked the volume damage, for now

EBITDA: $4.648 billion in H1 2026, up 68% year-on-year.

The financial results tell a different story from the operational ones. Codelco posted a pre-tax profit of approximately $1.97 billion in H1 2026, roughly four times the $429 million recorded in H1 2025. The group’s net profit for the period came in at $669 million.

The headline financial figures:

• Pre-tax profit: approximately $1.97 billion (versus approximately $429 million in H1 2025)
• EBITDA: $4.648 billion, up 68% year-on-year
• Realised copper price: 653.2 ¢/lb (versus 461.7 ¢/lb in H1 2025)

The engine behind this result was price, not volume. A 41% increase in the realised copper price more than offset the production shortfall. Direct cash costs moved 6.7% higher to 231.6 ¢/lb, a rise the prevailing price environment absorbed with room to spare.

That relief should not close the book on the operational question. A company that earns well in a strong price environment but cannot stabilise production has execution risk that the income statement currently obscures. If copper prices normalise, the volume gap becomes visible again in the financials.

The copper price outlook for the remainder of 2026 shapes how much operational underperformance a company like Codelco can absorb before the income statement takes a visible hit; at current realised prices, the buffer is substantial, but the margin for error narrows quickly in a correction.

Codelco’s capital allocation decision reinforces this reading. The full amount of 2025 net earnings was retained and capitalised rather than transferred to the Chilean state, indicating that the capital programme continues to require substantial and sustained funding. CEO Jorge Gómez, in releasing the results, framed restoring productivity as the corporation’s top operational priority, with safety, cost discipline, and capital efficiency as the operational pillars.

What this tells you is that management knows the financial tailwind is price-dependent. The decision to retain every dollar of earnings says the project pipeline, not the dividend, is where management sees the highest-return use of capital right now. At current price levels, each unit of recovered volume carries outsized profit leverage, which makes the cost of continued production decline higher than it would be in a weaker price environment.

The project pipeline: what is almost there, what is mid-construction, and what is a decade out

Near-term catalysts (next 12-24 months)

Rajo Inca stands out as the portfolio’s most credible near-term source of volume growth. Having reached 97% overall completion, the project began producing in December 2024 and is currently scaling toward its full design capacity, which is expected to be reached in 2027. The 18% production gain recorded at Salvador in H1 2026 already reflects a live and growing contribution from this operation.

Chuquicamata Underground Level 1 continuity infrastructure sits at 94% completion. With the April-May 2026 maintenance shutdown now behind it, the post-shutdown production trajectory is the most important near-term signal for this division. Full utilisation of this infrastructure is central to divisional recovery.

Medium-term build-out (2027-2029)

The Diamante project at El Teniente has progressed to 59% completion, with meaningful production volumes expected to emerge across the 2027-2029 period. There is a material difference between a project advancing on schedule and one in conservation mode: Andesita, the other El Teniente project, has been restricted to essential upkeep and technical preservation work since the July 2025 accident, and carries no confirmed date for resuming production.

Andes Norte remains paused for geomechanical and seismic studies, its production target revised to 2029. The medium-term window (2026-2028) is where execution risk concentrates most heavily, because the projects that need to deliver are the ones most exposed to the unresolved safety and geomechanical questions at El Teniente.

Long-dated structural value (2030 and beyond)

Under the Andina-Los Bronces joint mining plan, formalised in June 2026, the combined operation is projected to unlock an incremental 2.7 million metric tons of copper across a 21-year production life.

An incremental 2.7 million metric tons of copper across 21 years: the Andina-Los Bronces plan represents long-run structural value, not a catalyst for near-term production volumes.

Environmental permits are expected around 2030. For investors sizing positions today, this is a terminal-value input rather than a catalyst you can trade around. It changes the long-run cost curve, but it will not appear in quarterly production prints for years.

Codelco copper expansion projects have consistently attracted scrutiny over capital intensity and schedule adherence, and the Andina-Los Bronces agreement fits a pattern of large-scale joint plans that extend the production horizon while deferring near-term volume contributions.

How to read the execution risk before the next results cycle

The recovery case is contingent on three specific outcomes, and investors do not need to wait for the next full results release to assess whether each is tracking.

The six signals that carry the most information, in priority order:

Codelco investor relations reporting, which includes quarterly operational and financial reports, provides the primary source for divisional production figures, project completion percentages, and capital allocation disclosures that underpin the monitoring signals outlined above.

1. El Teniente divisional production prints: Are operational restrictions easing or persisting? Any further safety or geomechanical events would signal that subsurface risk remains insufficiently controlled and extend the restriction timeline further.
2. Chuquicamata post-shutdown trajectory: Is output normalising now that the April-May 2026 maintenance shutdown is complete and Level 1 infrastructure approaches full utilisation?
3. Rajo Inca ramp-up updates: Is the project tracking toward full design capacity in 2027 without technical setbacks?
4. Ministro Hales grade data: Is grade deterioration stabilising or accelerating? No project fix exists in the near-term pipeline for this division.
5. Diamante and Andes Norte milestone updates: Any revision to ramp-up schedules or the 2029 production target for Andes Norte would directly affect the medium-term recovery case.
6. Management capital allocation decisions: Whether Codelco continues capitalising profits or begins distributing to the Chilean state serves as a proxy for management’s confidence in the capital programme’s trajectory.

The distinction matters: headline profit figures will be largely price-determined in a volatile copper environment and therefore carry limited signal about operational quality. The divisional production prints and project milestone updates are where you will see earliest whether the gap between Codelco’s stated strategy and its operational execution is narrowing or widening.

Reading Codelco’s trajectory across three time horizons

Codelco’s H1 2026 results confirm a powerful commercial franchise and an uneven operational performance, and the investor verdict depends on which time horizon matters most to your position.

Near-term (12-24 months): The thesis depends on El Teniente restrictions easing and Chuquicamata post-shutdown performance returning to baseline. Rajo Inca’s ramp-up, already visible in Salvador’s numbers, is the single most de-risked catalyst. If all three track favourably, H1 2026 may prove to be a production floor rather than a new baseline.

Medium-term (3-5 years): The case rests on Diamante and the full Chuquicamata underground transition delivering design capacities roughly on schedule and within budget. Capital allocation discipline, retained profits and phased project execution, is the enabler. Any slippage back into cost overruns or delays would directly undermine the recovery case.

Long-term (decade-plus): The structural question is whether Codelco can invest fast enough and efficiently enough to offset grade decline at mature assets. The Andina-Los Bronces plan adds long-run tonnage, but permitting and implementation stretch well beyond 2030.

Chile’s copper supply position relative to Chinese refining capacity shapes how market participants price the geopolitical dimension of any supply disruption at Codelco, since a sustained production shortfall at the world’s largest mine operator cannot be easily substituted from alternative primary sources.

CEO Jorge Gómez has framed restoring productivity as the corporation’s top priority. The H1 2026 results set a specific accountability marker: the next two reporting periods will clarify whether the 11% decline was a trough or the beginning of a new structural baseline. The EBITDA rebound confirms the franchise can still generate substantial earnings when prices cooperate. The operational results confirm that delivering on it consistently requires execution that has not yet been demonstrated.

For investors sizing Codelco-linked exposure, the H1 2026 results do not deliver a verdict. They set the conditions under which a verdict can be reached over the next 12-18 months.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors.

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