Codelco's Ghost Tonnage Crisis Deepens as Escondida Strike Threat Looms

The crisis at Codelco — the world's largest state-owned copper producer — deepened alarmingly this week, as the government demanded an extraordinary shareholders' meeting to explain a second phantom-production scandal involving the Ministro Hales and Salvador divisions, just months after the company acknowledged having booked 27,000 tons of copper that never existed at its Chuquicamata and Ministro Hales divisions. The copper miner has hired KPMG to audit production across all its divisions for 2024 and 2025, while EY investigates the new double-counting. Economy and Mining Minister Daniel Mas summed up the situation bluntly: "It cannot be that at Codelco the books aren't in order." Layered on top of that institutional fracture is pressure from Congress's Mining Committee, which will demand reports on the fatal accident at El Teniente and could impose sanctions that bar companies from providing services to public and private firms. Codelco's operational and governance weakness comes at the worst possible moment: a new fatal accident in Illapel brings to six the number of miners killed in three weeks, and Sernageomin confirmed that twelve workers have lost their lives in mining accidents so far in 2026.

This institutional and safety deterioration in the mining sector coincides with a day of high tension at Minera Escondida, the world's largest copper deposit, operated by BHP. The Supervisors and Staff union — 1,020 professionals — came to the brink of launching a strike on Wednesday's first shift after the collapse of mandatory mediation, in negotiations where the company's conflict-closure bonus remained at 29.5 million pesos, a figure the union deemed insufficient alongside demands on wages, production bonuses, and access to biometric data. The walkout was averted at the last minute with a preliminary agreement that must be ratified by union members in the coming hours, according to two sources cited by Reuters. If not approved, the strike threat would resurface with immediate consequences for global copper production, given that the union had the backing of Operators and Maintenance Union No. 1, with 2,300 members.

Copper traded weakly despite that domestic geopolitical and operational pressure: the three-month benchmark contract on the London Metal Exchange slipped 0.3% to US$14,566 per ton — or US$6.6 per pound — dragged down by a massive sell-off in global tech stocks tied to advances by Chinese chipmaker CXMT, which weighed on the semiconductor sector linked to AI development. The IPSA, which resumed trading after the long weekend, closed lower above 11,000 points in a cautious session, with markets awaiting U.S. inflation data due Wednesday. The dollar climbed above $980 as traders priced in rising oil — Brent is hovering around US$105 per barrel — while the dollar index retreated 0.4%, erasing its earlier gains for the week.

The macroeconomic backdrop continued to darken. The IMF released its October World Economic Outlook and cut its growth forecast for Chile for the third time this year, from the 1.8% estimated in July to just 0.6% for 2026, leaving the country as Latin America's second-slowest-growing economy, trailing only Bolivia, which would contract 3%. The Central Bank's economic expectations survey was even more pessimistic, with a median of 0.2% and a range that includes contraction scenarios. If confirmed, this would be the fifth consecutive year in which Chile grows below the global average of 3.1%, a stretch without parallel in the country's recent economic history. Minister Mas insisted the government is confident in growth above 3% for 2027, though that projection is hard to reconcile with the current environment. A nuance: the IMF estimated that Chile's GDP per capita at purchasing power parity would end 2026 at US$37,008, keeping it the second-highest in Latin America after Uruguay, and projects it will top US$40,000 for the first time in 2028.

Macroeconomic weakness has its counterpart in the pension system. Fund E — the most conservative of the five AFP funds — accumulated a loss of more than 10% in the first nine months of 2026, a result that the executive president of the AFP Association, León Fernández de Castro, attributed to the behavior of fixed income in the current rate environment. The loss reignited the debate over whether low-risk assets still serve as a tool for wealth protection, and arrives at the worst political moment: the left-leaning Democratic Party is weighing a bill for a new pension fund withdrawal, which technical experts warn could trigger severe macroeconomic consequences, including pressures on inflation and the exchange rate.

On economic policy, the government confirmed it will send two bills to Congress in November for the SME sector, consolidating a first-category tax rate of 12.5% and simplifying formalization procedures. The measure seeks to deliver tax certainty amid sluggish business dynamism.

On the corporate and international expansion front, Chilean tech firm Healthatom opened offices in Madrid to compete in the European digital health market, where some clinics still operate on local servers, and is preparing to enter three other countries on the continent. Dole Chile projects exports of 8.2 million cherry boxes this season and is studying tripling its domestic market sales with the addition of berries. Grupo Hijuelas invested US$3 million alongside Les Domaines Agricoles — linked to the Moroccan royal family — to create Frutivar, a fruit plant production company in Africa. And Chile Week China 2026 will include a delegation from the technology and artificial intelligence sector for the first time, a signal of a bid to diversify the export offering beyond commodities, at a time when bilateral trade with China exceeds US$67 billion annually.

In the coming days, market attention will be split between ratification or rejection of the Escondida preliminary agreement — which will determine whether the strike is reactivated — Wednesday's U.S. CPI print and its implications for the dollar and global rates, the outcome of KPMG's audit of Codelco, and President Kast's visit to Bolivia on Friday, the first by a Chilean head of state in more than seventy years, which could open a new chapter in a historically tense bilateral relationship.