Codelco Leadership in Focus as Chile Voters Shift to Right

Maximo Pacheco Photo by Cristobal Olivares /Photographer: Cristobal Olivares

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(Bloomberg) — Lea en español

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Chileans on Sunday picked right-winger Jose Antonio Kast to head the country. Now, the mining industry is focused on who he will choose to lead state copper giant Codelco.

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The names of a handful of former ministers and senior executives are circulating among analysts for one of the most influential jobs in global mining. Codelco’s output is hovering just above quarter-century lows, contributing to copper’s record-high prices.

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The role is unusually demanding. Beyond traditional governance duties and keeping the state — the sole shareholder — onside, the chair oversees vast and often troubled mines and expansion projects, as well as one of the sector’s largest debt burdens. The position requires political dexterity, especially around decisions that could trigger job losses. With roughly 75,000 workers, including contractors, Codelco is an economy unto itself and a critical source of state revenue.

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Current Chairman Maximo Pacheco has been pushing to lift output to pre-pandemic levels of 1.7 million metric tons, from about 1.4 million today. In his roughly 3.5 years in the post, he has battled to reverse production declines and stabilize projects, with two chief executive officers and several managers leaving during his tenure. 

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The job has become somewhat of a poisoned chalice: the company is trying to recover from decades of underinvestment and declining ore grades while handing over most of its profits to the government — forcing it to tap debt markets to finance an enormous investment program. The new chair will also have to take on the company’s foray into lithium, which has been criticized by analysts as a distraction from the company’s main copper tasks. 

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Kast, who takes office March 11, has said he plans to audit Codelco’s finances and operations.   

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The following are some names being touted as Pacheco’s replacements when his contract expires in May. All declined comment, as did Codelco. Kast’s camp didn’t immediately respond.

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Juan Carlos Jobet: After studying at Harvard University and stints in investment banking and corporate finance, Jobet served in the cabinet of both governments of deceased center-right leader Sebastián Piñera, the second as minister of energy and mining. He’s been in academia since.   

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Alfredo Moreno: The engineer, businessman and political figure also served in both Piñera administrations — overseeing the foreign affairs, social development and public works ministries. Since then, he’s held private-sector positions, including leading major business associations. He serves on the Codelco board.

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Joaquín Villarino: A former law professor who has served on the boards of major Chilean firms is best known as the executive president of Chile’s Mining Council, the main industry association.

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Thomas Keller: The executive with a University of Chicago MBA has held major roles in mining, retail and energy, including the top job at Colbun SA. He was also CEO of Codelco — leaving in 2014 amid disagreements with some board members on how to run the company. 

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(Adds that names are being circulated by analysts in second graph)

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