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Chile’s Codelco, the world’s largest copper producer, is reassessing the costs of upgrades to extend the life of its mines, its chairman said, given cost overruns at El Teniente and Chuquicamata.

Higher costs could mean Codelco’s debt is likely to reach $30-billion by 2030 from $18-billion now, Chile’s Centre for Copper and Mining Studies (CESCO) said in a rare intervention, in August.

Mounting costs were also cited as a reason by Moody’s Investors Service for its credit rating downgrade for the state-owned miner.

However, Chairman Maximo Pacheco said robust interest in a bond issued recently showed “confidence” in Codelco was strong, adding that the company would maintain capital spending next year at $4-billion, roughly in line with 2023.

“We delayed some maintenance and we had some disruption in our operation (during Covid). After Covid we have inflation not seen for years,” Pacheco said ahead of the London Metal Exchange industry gathering next week.

The company, which has some of the highest input costs for miners in Chile, said in July direct production costs during the first six months of the year jumped 41.3% to hit about $2.12 per pound, from $1.506 the year before.

“We are late on our projects, We are with projects that are more expensive,” Pacheco said.

“But Codelco’s production will not continue to decline. From 2024 production will start to go up. There is good reason to believe production will reach levels of 1.7-million tonnes by 2030 gradually.”

At the heart of Chile’s mining industry and a major contributor to state revenues, Codelco needs to revive its copper production from a 25-year low.

“The market clearly knows we are facing a reduction in production,” Pacheco said.

“This is not just about the level of production, it is about the extension of the life of our mines.”

Pacheco said China remained an important market accounting for 40%-45% of Codelco sales despite a restructure of its sales strategy.

Codelco has been grappling with a host of challenges apart from issues at mining sites.

On Thursday, Codelco announced its CFO Alejandro Rivera had resigned effective November 3, just months after the surprise June resignation of its CEO.

Pacheco also reiterated the company expected to reach an agreement with lithium miner SQM by the end of the year.

Chile’s government earlier this year announced plans to strengthen state control of the white metal, only allowing public-private partnerships to participate in lithium exploitation.

The South American country has the world’s largest lithium reserves.