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Antofagasta hits targets despite headwinds

By Jenni Reid

13:11, 20 October 2021

Aerial view of Antofagasta’s open-pit Zaldivar copper mine
The London-listed miner said copper production and cost performance were in line with expectations, despite a host of challenges – Photo: Antofagasta

London-listed miner Antofagasta today said its copper production and cost performance during the third quarter were in line with its expectations, despite various pressures including an ongoing drought in Chile, the global supply-chain and energy crises, and Covid-19 impacting the labour market. 

The company increased copper production at its Chile mines by 1.5% to 181,100 tonnes, bringing its total production for the year to 542,600 tonnes – 0.2% higher than last year. It also produced more gold, but less molybdenum over the quarter. 

Copper sales were up by 11.6% in the third quarter, though its year-to-date performance is 1.4% down on last year. 

Costs up

The company’s net cash costs were $1.16/lb in the third quarter of 2021 – a 2.7% increase over the previous quarter – and $1.15/lb for the year-to-date, which was 0.9% higher than the same period last year.

The company said higher costs were partly due to the global energy and supply-chain crisis during the third-quarter period, which had also led to higher prices for the commodities.

It also noted that evidence of wage inflation had been limited to temporary hires, mostly for projects, and that the weaker Chilean peso in the third quarter offset higher input costs.

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Commenting on the company’s outlook following the results, chief executive Iván Arriagada said: “The construction of the desalination plant at Los Pelambres is on track for completion in H2 2022, and we now anticipate group production in 2022 to be between 660,000 and 690,000 tonnes, reflecting the previously advised production tonnes at risk at Los Pelambres due to the weather and lower grades at Centinela Concentrates.

“The Covid-19 situation in Chile continues to improve, but the measures we implemented last year will stay in place as we continue to prioritise the health and safety of our employees and surrounding communities,” said

“While we expect the extraordinary global supply-chain events and energy crisis to ease over time, we remain focused on controlling costs while progressing our current and future growth projects.”

Antofagasta’s share price was down by 2.07% to 1,445.50p on the London Stock Exchange at 15.00 BST on Wednesday afternoon. 

Read more: Australian miner South32’s shares soar on Chile mine deal

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