Codelco CEO leaves as copper giant faces lithium role, output slump

Chile’s state-owned Codelco said its chief executive, Andre Sougarret, is stepping down after less than a year in the job, as the world’s largest copper producer grapples with declining production and its new role in the country’s lithium industry.

Sougarret, an engineer who gained prominence when leading the rescue of 33 miners trapped in a northern mine in 2010, will remain in his post until Aug. 31, Codelco said in a statement.

The 58-year-old cited difficulties in reconciling the demands of running the giant miner with those of his personal life, but said he would stay while the company seeks a replacement.

Sougarret took over from Octavio Araneda, who spent 36 years in Codelco, last August. At the time, Araneda said he was leaving due to health reasons. Shortly after, however, he joined private Chilean miner Antofagasta (LSE: ANTO) as director of operations.

Sougarret began his career at Codelco in the El Teniente Division in 1993. In 2012, he joined Antofagasta Minerals as general manager of Esperanza and, later, of Centinela.

He has also held the role vice president at the National Mining Company (Enami), before leaving for Mexico as director of operations of Minera Fresnillo. 

The mining professional returned to Codelco at the end of 2020 to take over as vice president of Northern operations until he was appointed executive president last year.

Production at 25-year low

Codelco’s copper production has fallen this year more than 11% to at a 25-year low, despite investing about US$3.5 billion a year to revamp its aging mines. 

The state miner has recently been charged with the role of representing the Chilean government in new public-private contracts to mine lithium.

Critics have said that Codelco does not have enough knowledge and expertise in the lithium industry, as it does of copper. Its chairman Máximo Pacheco disagrees and has said what matters the most is Codelco’s track record in mining as well as its international reputation, financial capacity and experience with private sector partners.

“We would be an extraordinarily short-sighted company if we don’t enter the lithium business,” Pacheco told a local newspaper last week.

Chile, the world’s top copper-producing country and No. 2 for lithium, has seen policy shifts this year, with President Gabriel Boric hiking royalties for private mining firms and announcing plans for more state control over lithium.