Codelco Probes Inflated Copper Output as LME Complex Climbs and Nickel Surplus Looms
Codelco opened an investigation into over-reported 2024 and 2025 copper production, submitting findings to prosecutors, while the LME complex rose broadly on October 6 and Japan's largest nickel smelter forecast another global surplus in 2027.
Chile's Codelco said on Tuesday it is investigating new evidence of over-reported copper production in 2024 and 2025. The reported figures showed artificially inflated output from the Ministro Hales and Salvador divisions, potentially because the same material was recorded as production by more than one division. The state miner has tapped consulting firm EY to conduct an external audit and submitted the findings to the public prosecutor's office, saying it will seek to recover any financial losses.
The probe deepens concerns about the reliability of Codelco's production data at a time when the company is trying to lift output toward 1.7 million tonnes a year by 2030. Production at its own mines stood at 1.33 million tonnes last year, and management has said output in coming years is likely to stay close to current levels. Codelco previously fired an executive and took disciplinary action against others following an audit into improper reporting of 2025 production involving the Chuquicamata and Ministro Hales mines, where material requiring further processing had been reported as finished product.
Against that supply backdrop the LME complex rose broadly on October 6. Three-month copper closed at $14,409 a tonne, up $8; aluminium at $3,143.50, up $22.50; zinc at $3,772.50, up $32; nickel at $15,670, up $25; and lead at $1,871.50, up $2. Tin was the only loser at $54,135, down $255. Traders attributed the move to a softer dollar after weak September payrolls, with metal-specific inventory and supply differences deciding the direction of each contract.
Nickel remains the weakest link. Sumitomo Metal Mining, Japan's top nickel smelter, forecasts a global surplus of 34,000 tonnes in 2027, extending a run of oversupply that has already reshaped the sector's asset base - BHP agreed on October 6 to sell its shuttered Kambalda nickel processing mill in Australia to Gold Fields, more than two years after suspending the wider Nickel West business.