Capital without Capacity? Claimant congestion, capitalization ceilings, and the public-value boundary in state-owned mining: a calibrated application to Codelco

<title>Abstract</title> <p>State-owned mining companies must finance long-lived replacement and expansion projects while governments, creditors, employees, contractors, communities, and prospective investors make claims on the same mineral surplus. Minority capitalization can reduce leverage and strengthen governance, but it also creates durable cash-flow and control rights. This paper develops claimant congestion as a distinct mechanism linking financing structure to productive performance. The model combines effective mining capital, debt, organized claimant pressure, bridging organizational cohesion, and execution capability. An exact public-value multiplier identifies when an issuance raises enterprise value but lowers public value, separates parent from project equity, and defines a capitalization boundary at which the marginal public return becomes negative. A reconstruction of Codelco for 2009–2025 shows that US$58.1 billion of investment during 2010–2025 accompanied a 19.8% decline in production, a 25.9% decline in average ore grade, an 8.2% increase in a grade-adjusted throughput proxy, and a US$19.6 billion increase in net debt. Nested mechanism ablation shows that organizational absorption and portfolio overload create finite boundaries, direct claimant entry compresses them, and governance-mediated claimant feedback changes both their location and the ranking of instruments. Continuation of the actual post-issuance equilibria finds residuals below 3.3e-7, negative spectral abscissae, and Jacobians bounded away from singularity over architectures up to approximately US$20 billion; the benchmark transition is therefore a smooth public-value inversion rather than a fold or Hopf bifurcation. An 800-draw uncertainty analysis yields median public-value-maximizing scales of US$7.92 billion for parent common equity, US$4.17 billion for preferred equity, and US$6.25 billion for both project and layered packages. The results support staged capitalization, project ring-fencing where assets are separable, a structural distribution rule, and secure but bounded state control.</p>