A recent mishap at a century-old copper smelter owned by Codelco is stoking debate over the pros and cons of shutting it down as a global smelting glut puts pressure on old, high-cost plants.

Some at the Chilean state-owned miner are pushing for a permanent closure at the Potrerillos smelter, with a chimney collapse last month underscoring its deficiencies, said people with knowledge of the matter. They asked not to be identified given no decision has been made and it may not even go to the board.

“At this time, there is no formal process in place regarding the closure” of Potrerillos, Codelco said Monday in an emailed response.

Potrerillos is one of Codelco’s three remaining smelters after the world’s biggest copper supplier shut its Ventanas plant in 2023 over environmental concerns. Potrerillos has running costs that are double the global average, according to industry estimates, and may struggle with stricter emission rules.

The global backdrop is one of record-low fees that smelters charge mining companies due to a China-led surge in capacity and disruptions in supplies of mined ores.

To be sure, mothballing Potrerillos would be a tough decision for Codelco.

Smelters may not be profitable as a standalone business right now, but they give miners greater commercial flexibility and ease reliance on China. They also generate the sulfuric acid used in other mine processing, and can save on shipping costs given semi-processed ore contains as little as 25% copper.

In addition, any decision to shut Potrerillos would mean local job losses when the government is promoting activity beyond mining. It would also come as another blow to Codelco’s Salvador division, where a project to overhaul mining operations has endured multiple setbacks.

Still, it may make sense in Chile’s broader smelting strategy, where fellow state-owned Enami is looking to modernize its shuttered plant and Codelco is seeking investors to built a new northern smelter that would be far cleaner and cheaper to run.