Codelco, the world’s largest copper producer, is looking for a new chief executive officer at a time when output is running at its lowest in a quarter century and costs have surged.
(Bloomberg) — Codelco, the world’s largest copper producer, is looking for a new chief executive officer at a time when output is running at its lowest in a quarter century and costs have surged.
Andre Sougarret, the engineer who led the rescue of 33 trapped miners in Chile more than a decade ago, resigned as CEO after less than a year in the job. In a statement late Tuesday, the 58-year-old cited difficulties in reconciling the demands of running the state-owned behemoth with those of his personal life.
His brief tenure as CEO had been challenging. A string of setbacks at Codelco’s mines combined with delays in key development projects saw production and profit plunge. The company’s wobbles come just as Chile’s government needs more money to fight social inequalities and the world needs more copper as it transitions away from fossil fuels.
“It has not been easy to reconcile the demands of the position with the care of the other facets that make up the life of a human being,” Sougarret said in the statement.
He’ll remain in the position until August as the search for his replacement gets underway.
Read More: The Green Energy Transition Has a Chilean Copper Problem
Sougarret has been leading a process to get Codelco’s mines and projects back on track. Production is down by about a fifth in just six years. After a double-digit percentage drop in 2022, output is expected to fall as much as 7% this year.
Codelco is looking to recover from recent mishaps at some of its mines, including a rockfall, equipment malfunctions and a freeze at a dam that restricted water supplies. It’s also investing about $3.5 billion a year to revamp mines that are running out of profitable ore. Project work is proving difficult across the industry amid logistical challenges exposed by the pandemic and exacerbated by Russia’s invasion of Ukraine.
Sougarret’s departure comes just as Codelco takes on the responsibility of representing the state in new public-private contracts to mine lithium. Adding lithium to Codelco’s load was a “terrible” decision, economist and former central banker, Joaquin Vial, told a seminar on Tuesday.
Sougarret took over as CEO in August of last year from Octavio Araneda, who stepped down due to health reasons. Sougarret received global acclaim and a slew of awards for his work freeing miners at the San Jose mine in 2010.
He began his career at Codelco in the giant El Teniente underground mine in 1993 before stints at Antofagasta Plc, state-owned Enami and Mexico’s Fresnillo Plc. He returned to Codelco in late 2020 heading the firm’s northern operations.
Codelco’s woes are part of an industry-wide story as ore grades decline and new deposits get harder and costlier to develop. That’s stoking fears of global supply being outpaced by demand for a metal used in batteries, solar panels and other green technologies.
–With assistance from Eduardo Thomson.
(Adds CEO comment in fourth paragraph)
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