Chilean copper miner Antofagasta Plc (LON:ANTO) reported an almost 22% increase in copper output in the three months to June 30, thanks mostly to an expansion at its flagship Los Pelambres mine and better ore grades at Centinela, both in Chile.
Production in the second quarter was 198,600 tonnes of
copper, 5.3% higher than the prior quarter with all operations registering an
increase. For the first half of 2019, copper output rose 22% year-on-year to
387,300 tonnes.
The FTSE 100 company, majority-owned by Chile’s Luksic family, maintained its full-year copper production forecast of 750,000 -790,000 tonnes.
Los Pelambres expansion, kicked off early this year, includes the construction of a desalination plant and water pipeline.
In terms of net cash cost, a measure of the cost of producing
a pound of copper, it lower its projected price to $1.25 per pound, as it
expects to benefit from a weaker Chilean peso.
Antofagasta said Los Pelambres churned out 91,200 tonnes of copper in the quarter. The expansion, which began early this year, is slated to begin production in the second half of 2021.
As part of the project, the company is building a desalination plant and water pipeline, which will benefit the existing operation in cases of prolonged or severe drought, and for a potential further phase of expansion, chief executive officer Ivan Arriagada has said.
Copper miners in mature markets, particularly in Chile, the
world’s top producer of the red metal, have seen production costs rise as they
need to dig deeper and process larger amounts of rock to obtain the same amount
of copper they used to a decade ago.
At the same time, prices have been volatile due to the
ongoing trade war between China, the world’s top consumer of the metal, and the
United States.
On Wednesday, benchmark copper on the London Metal Exchange
traded up 0.5% at $6,000 a tonne.
The metal, used widely in the power, construction and electric
vehicles sectors, hit a six-month low at $5,740 in June.