Chile, definitively, is not falling apart, the state is not bankrupt, and Codelco is not ruined.
As Máximo Pacheco prepares to hand over the presidency of Codelco on May 25, his departure marks not merely a change in leadership but a collision between two visions of what Chile's most symbolically charged institution should be. The world's largest copper producer, born of nationalization and constitutionally protected, now faces government-ordered audits and renewed privatization whispers under a conservative administration that arrived with questions already formed. Pacheco speaks not as a man retreating, but as one who understands that the defense of a public enterprise is itself a philosophical act — that how a nation manages its copper is, in some measure, how it understands itself.
- A conservative government barely two months old has already ordered an external audit of Codelco, signaling that the previous era's stewardship is under formal suspicion.
- Preliminary findings suggest production figures for December 2025 were inflated by nearly 20,000 tons — a revelation that arrived in Pacheco's inbox as an anonymous complaint and now fuels political fire.
- Codelco's $25 billion debt, framed by critics as mismanagement, is recast by Pacheco as the predictable consequence of a state that extracts nearly all profits while demanding world-class infrastructure investment.
- Four structural megaprojects delayed by pandemic, geopolitical crisis, and geological complexity are nearing completion — but the incoming board may inherit the credit while assigning the blame elsewhere.
- Privatization, a ghost that has haunted Codelco since the 1970s, stirs again as new leadership takes the helm, even as constitutional protections make any such move a matter for Congress, not corporate boards.
Máximo Pacheco will leave Codelco at midnight on May 25, closing four years as board president of the world's largest copper producer with the measured composure of someone who has chosen to speak before the door shuts. He sits in a renovated conference room on the eleventh floor of Codelco's Santiago headquarters, defending a tenure that the new Kast administration has already begun to scrutinize publicly.
The political atmosphere is charged. At the annual shareholder meeting in late April, Finance Minister Jorge Quiroz asked pointedly whether Pacheco had any self-criticism to offer — a courtesy-wrapped rebuke targeting high debt, heavy investment, and falling production. Mining Minister Daniel Mas has since announced that incoming board president Bernardo Fontaine will oversee an external audit to give Chileans the information they supposedly deserve. It is a familiar posture: install suspicion, announce inquiry, imply inherited disorder.
The audit's most uncomfortable finding is already public: production figures for December 2025 appear to have been inflated by nearly 20,000 tons. Pacheco responds by pointing to Codelco's forty-one internal auditors, its anonymous complaint channel — which received 385 submissions in the first quarter of 2026 alone — and the fact that he forwarded the triggering complaint to the general auditor within hours of receiving it. He frames this not as a scandal but as evidence of institutional transparency functioning as designed.
On debt, Pacheco is unapologetic. Codelco carries $25 billion in liabilities, but he argues the figure is a direct consequence of the state's extraction model: a 10 percent tax on sales unique in Chile, royalties, profit taxes, and historically 100 percent dividend transfers to the government. Under comparable rules to private competitors, he calculates, the debt would be $5 billion. Former President Boric's decision to allow 30 percent profit reinvestment was a rare correction; the Kast government has already signaled it will not continue the policy.
Beneath the accounting dispute lies a deeper argument about what Codelco is for. Founded in 1971 when Allende nationalized four copper deposits, the company carries constitutional weight that Pacheco invokes with evident reverence. He acknowledges that ore grades have halved since 1990, that extraction now demands twice the earth-moving for the same yield, and that global copper demand is accelerating with electrification and digitalization. His projection: 1.7 million tons annually by 2030, and $8 billion in EBITDA this year alone.
Pacheco also raises the privatization question himself — noting that proposals to sell Codelco have circulated since the late 1970s, and that the company's 100 percent state ownership is a constitutional matter for Congress, not the board. He leaves, he says, with his head held high, transitioning to lead NovaAndino Litio, the joint venture between Codelco and SQM that makes Chile the world's largest lithium producer. Whether that continuity survives a reconstituted board meeting on May 28 remains to be seen.
Máximo Pacheco is leaving. On May 25, the 73-year-old economist will step down as president of Codelco's board after four years steering the world's largest copper producer through a period of scrutiny, structural upheaval, and now, political turbulence. He sits in a recently renovated conference room on the eleventh floor of Codelco's headquarters in downtown Santiago, speaking to a journalist from El País with the measured tone of a man who has decided to defend his record before the door closes behind him.
The timing is awkward. Two months ago, José Antonio Kast's conservative government took office, and it has wasted little time signaling skepticism about Codelco's direction. In late April, at the annual shareholder meeting Pacheco chaired, Finance Minister Jorge Quiroz posed a pointed question after the outgoing president's presentation: "Is there no self-criticism?" The question hung in the air, a rebuke wrapped in courtesy. Quiroz was referring to high investment levels, rising debt, and falling production. This week, Mining Minister Daniel Mas announced that once Bernardo Fontaine assumes the presidency—a position ratified Thursday—an investigation and external audit will commence to "gather information Chileans deserve to know." It is the same posture the Kast administration has adopted across the board: install suspicion, announce inquiries, signal that the previous government left things in disarray.
Pacheco's departure is not quite an exit. He has been elected president of NovaAndino Litio, the world's largest lithium producer and a joint venture between Codelco and the private mining company SQM. But his continuity depends on a reconstituted board meeting for the first time on May 28. In Chilean media, observers describe this as a complicated end of cycle for Pacheco. Yet in this conversation, the economist presents himself as proud and happy with what he accomplished. Codelco, he notes, was born in 1971—fifty-five years ago—when Salvador Allende's government nationalized four major copper deposits: Chuquicamata, Salvador, Teniente, and Andina. It is a company with constitutional weight, and Pacheco speaks of it with the reverence of someone who understands its symbolic importance to the nation.
The audit is the elephant in the room. An internal investigation has preliminarily revealed that production figures for December 2025 were inflated by nearly 20,000 tons to show recovery. When asked directly whether the government should have been informed, Pacheco responds by invoking Codelco's legal autonomy and its governance structure. The company, he says, has forty-one internal auditors plus external specialists, and operates under scrutiny that few Chilean companies experience. The anonymous complaint that triggered the investigation arrived in his email on February 25, 2026, at 5:49 p.m., and he immediately forwarded it to the general auditor. In the first quarter of 2026 alone, Codelco received 385 complaints through its anonymous channel—several of them anonymous. This, Pacheco argues, speaks to a culture of probity and transparency.
On the question of ambitious production targets, Pacheco does not retreat. For fifty years as an executive, he has believed companies must set stretch goals. These motivate teams, align effort, and energize talent. But he insists that at Codelco, values remain central to the business model. The real problem, he argues, is structural and geological. In 1990, ore grade was 1.3 percent; last year it was 0.65 percent. To extract the same amount of copper, the company must move twice as much earth. This is not unique to Codelco—it is happening worldwide. Copper demand is rising because of electromobility, digitalization, data centers, and renewable energy. But finding it is harder every year. Exploration requires deeper drilling, longer haul distances, more electricity, more water, and increasingly, desalinated water. Pacheco projects that production will stabilize and that by 2030, Codelco will produce 1.7 million tons annually.
The debt issue cuts deeper into the political tension. Codelco's debt reached $25 billion in 2025, up nearly $1 billion from the previous year. Pacheco's explanation is blunt: the state extracts Codelco's surpluses through multiple mechanisms. The company pays a 10 percent tax on sales—unique in Chile—plus royalties, profit taxes, and an additional 40 percent tax for being state-owned. Historically, 100 percent of profits have been transferred to the state as dividends, with two exceptions: a $3 billion capitalization under Bachelet and Boric's decision to retain 30 percent of profits for reinvestment. Pacheco argues this is abnormal. Private mining competitors worldwide reinvest 30 to 40 percent of profits and do not face a 10 percent sales tax. If Codelco operated under the same rules, he calculates, its debt would be $5 billion, not $25 billion. The Kast government, he notes, has already signaled it will not maintain Boric's 30 percent reinvestment policy. Pacheco says he would prefer it did, but acknowledges it is the president's decision to make.
As he prepares to leave, Pacheco is adamant on one point: Chile is not falling apart, the state is not bankrupt, and Codelco is not ruined. The company will generate $8 billion in EBITDA this year—$23 million per day. It has formed twelve new joint ventures in the past three years and transformed itself from a single-commodity copper producer into a lithium and copper corporation. The criticism, he suggests, reflects a broader Chilean tendency to view success with suspicion. He also raises the specter of privatization. Since at least 1976 or 1977, he says, certain sectors have proposed privatizing Codelco. The idea is not new. But the constitutional status of Codelco's 100 percent state ownership was settled in 1971 and reinforced in 1980. That is a matter for Congress, not for the board. What he can say is that at Codelco, they feel like a proudly state-owned enterprise. He leaves on May 25 at midnight, he says, with his head held high.
Citações Notáveis
I leave happy. I feel very proud of the management we have done: we built a very solid strategic platform for Codelco.— Máximo Pacheco
If we operated under the same rules as our competitors—the same taxes and reinvesting 30-40% of profits—Codelco's debt would be $5 billion, not $25 billion.— Máximo Pacheco
A Conversa do Hearth Outra perspectiva sobre a história
You mention that production figures were inflated by nearly 20,000 tons in December 2025. How does something like that happen inside a company with forty-one internal auditors?
It happens because people respond to pressure. When you set ambitious targets—stretch goals—you create an environment where hitting those numbers matters. Someone, somewhere, decides the gap between what was produced and what was reported is acceptable. The system caught it, eventually, but not before the damage was done.
And yet you defend setting those ambitious targets. Isn't that a contradiction?
No. The targets are necessary. The problem is not the targets themselves—it's the culture that grows around them. You can have ambitious goals and still maintain integrity. But you have to mean it. You have to actually punish the people who cut corners, not just talk about values.
The new government seems to think Codelco is in crisis. You say it is not. Who is right?
We are both right, depending on what you measure. By the numbers—EBITDA, market position, strategic partnerships—Codelco is strong. But by the political measure, by the measure of public confidence, by the measure of whether the government trusts the institution, Codelco is in trouble. That is a different kind of crisis.
You attribute the debt to state dividend extraction, not mismanagement. But couldn't both be true?
Of course they could. But the debt would exist even with perfect management, because the state designed the system that way. The state takes the profits and tells the company to borrow for investment. That is a policy choice, not a failure of execution.
Do you think the new government will privatize Codelco?
I think they would like to. But the Constitution protects it. So instead, they will make it harder to operate, more expensive to maintain, more politically vulnerable. They will not privatize it directly. They will just make it so difficult that eventually, someone will argue that private management would be better. That is how these things happen.
And you are comfortable leaving now, with all of this uncertainty?
I am leaving because my term is over. I have done what I came to do. What happens next is not my responsibility anymore.