Codelco gets double downgrade at S&P as copper slump swells debt

The Chilean state-owned miner’s long-term foreign currency rating was downgraded to BBB+ from A, S&P said Wednesday. It follows recent cuts by Fitch Ratings and Moody’s Investors Service.

Codelco’s production levels are at the lowest in a quarter century while costs have surged. Management is battling to bring late and over-budget projects on stream to counter that slump, embarking on a $40 billion overhaul of its aging mines.

“We now expect Codelco will use more debt in 2024 than we previously expected,” S&P analysts led by Diego Ocampo wrote. “We also don’t expect capitalization from the owner or any other sort of alleviation at this point.”

S&P’s outlook for Codelco is stable given the very high likelihood of government support in an event of financial distress.