Chilean miner Antofagasta Plc. (LON: ANTO) said Thursday it was striving to offset the impact of lower copper prices, which have fallen 4% this year due to uncertainties brought by the US-China trade war.
Despite the challenges, the FTSE
100 company, majority-owned by the Chile’s wealthy Luksic family, reported a
44% increase in first-half earnings to $1.3 billion, from $904.2 million last
year.
The miner, which has focused on
controlling costs since the onset of tensions between Washington and Beijing, expects
copper output to decline in 2020 close to 2018 levels. The company attributed
the forecast production drop on lower grades at its Centinela mine, , which
began churning out copper in 2001 and has 49 years of mine life remaining, but
said such fall should be partially reversed in 2021.
“Antofagasta remains the best
positioned of the European copper pure plays,” BMO Capital Markets’ analyst, Edward
Sterck, wrote in a note to investors.
“Its strong balance sheet, quality
of assets and operational performance, along with consistently high
shareholder returns over time, justifies its higher price compared with its
peers,” he 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.