SURFACE

Codelco maintains focus on productivity

Productivity was the key theme as Chile’s state copper company Codelco published its 2019 annual report.

Productivity key for Codelco

Productivity key for Codelco

Facing declining grades and deeper, more expensive mining at its aging operations, executive president Octavio Araneda said increasing productivity was essential to ensure the sustainability of the company in the long-term.

"At Codelco we are facing a process of transformation to deal with a complex domestic and international market scenario. Our challenge for the medium and long term is sustain business profitability amid complex conditions: depleting deposits, are of lower quality or are increasing depth; the increased cost of hand labour and key inputs, and volatility in the price of copper due to different factors. For this, we must be more productive," he said.

Since 2014, productivity—measured in tonnes of fine copper produced per worker—has increased 58.8% to 48.9 tonnes from 30.8t, although this missed the company's target of 51.2t due to lower production due to weather factors, strikes and concentrator maintenance.

Productivity improvements have been achieved over the past five years through the implementation of lean management principles under Codelco's C+ programme, which seeks to empower workers. This has enabled the company to reduce its number of executives 5.6% in 2019 compared with 2018, and the number of supervisors by 10.6%.

Overall, Codelco has reduced its headcount by more than 15% since 2015 and 10% since 2018 to 16,194 workers. The use of subcontractors has also reduced almost 14% since 2015 10 19,946 in 2019 from 23,098 in 2015.  

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