Codelco Strategic Proposal: Copper to Lithium Pivot

Codelco: Strategic Proposal

Strategic Overview and Growth Initiatives for the World's Leading Copper Producer

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• Company Profile and Market Position
• Operational Challenges and Performance Analysis
• Strategic Pivot to Lithium Mining
• Future Outlook and Recommendations

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1

Market Leadership and Operations

Understanding Codelco's scale and core business dynamics

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• 1.332M t: Copper Output
• 2nd: Global Rank
• 70+ years: Reserves Life

• World's largest copper mining company (historically dominant)
• Principal product is cathode copper, supplemented by molybdenum, rhenium, gold, and silver
• Generates roughly 2.6% of Chilean state revenue (as of 2020)
• Chile remains the world's largest copper producer since 1983

2

Challenges and Strategic Evolution

Addressing productivity declines and market diversification

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Strengths

• Massive copper reserves and long-term mining plans
• Established infrastructure and skilled workforce
• Critical role in Chilean state revenue generation

Weaknesses

• Geomechanical instability at key mines (El Teniente, Chuquicamata, Ministro Hales)
• Significant production decline from 2021 to 2023
• Operational challenges impacting efficiency targets

Opportunities

• Lithium brine mining in Salar de Atacama and Maricunga
• Diversification through strategic joint ventures (Nova Andino Litio, Rio Tinto)
• Rising demand for electric vehicle battery minerals

Threats

• Stagnant or declining production since 2004
• Increasing competition and global production shifts
• Declining grade of copper ores due to resource depletion

• Launched National Lithium Strategy in 2023 to expand into battery metal markets
• Nova Andino Litio (2025): JV with SQM to operate in Salar de Atacama
• Salar de Maricunga (2025): Partnership with Rio Tinto for lithium brine extraction
• Strategic pivot ensures relevance in the energy transition economy

Conclusion: Path Forward for Codelco

Ensuring sustainable leadership through innovation and diversification.

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