Antofagasta Plc
Antofagasta Plc
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Higher Q1 20 production and lower costs has Chilean copper major Antofagsta holding to FY/CY20 guidance, but with its flagship Los Pelambres expansion on C&M
Chilean copper leader Antofagasta has suspended the $US1.3B expansion of its Los Pelambres project for an estimated 120 days due to the health emergency caused by the coronavirus pandemic.
"This is a temporary suspension that has been taken as it is not possible to continue with the construction of the project as originally planned,” projects VP Francisco Walther said. The company hoped to resume work as soon as possible once the emergency had passed.
Global miner Anglo-American will scale down operations at its Los Bronces copper mine in Chile to the minimum necessary to ensure “operational continuity” amid the spread of the coronavirus in the nation that is the world´s top producer, Reuters reports.
The expects minimal impact on output as it planned to continue processing stockpiled copper.
Despite record copper production and a big jump in gold output, Chilean copper giant Antofagasta’s Dec 2019 year (FY/CY19) net profit has fallen to $US843.1M from the previous year’s $880.3M profit.
The bottom line was on revenue up 4.9% to $4.96B, reflecting the increase in copper/gold sales, partially offset by the decrease in the realised copper price. EBITDA was also up to $2.43B from $2.22B.
The distractions of civil unrest and supply blockages have not prevented Chilean copper giant Antofagasta achieving record copper production of 770,000t for FY2019, up from 725,300t in the previous year and at the top end of its revised guidance.
Gold production also rose to 282,300oz (FY2018: 210,100oz) while molybdenum output fell to 11,600t (13,600t).
Net cash costs improved to $US1.22/lb ($1.29/lb).
Chilean copper giant Antofagasta has tightened its FY2019 production guidance in response to civil unrest and labour unrest that have impacted production in the first three quarters.
Although all its mines are now back in production, Antofagasta says the blocking of access roads that disrupted supplies and damage to ancillary infrastructure at Los Pelambres are now estimated to cut about 10,000t from full year output.
The strike that began on Oct 16 at Antucoya, now settled through negotiations with the union, is expected to cost 4,000t.
Chilean major Antofagasta is maintaining FY2019 production guidance at 750,000-790,000t copper with costs below $US1.25/lb despite Sept qtr (Q3) output declining to 197,000t copper and 77,600oz gold from the previous period’s 198,600t Cu and 86,900oz Au. Net cash costs improved marginally to $US1.12/lb (Q2: $1.14/lb).
CEO Iván Arriagada says its strong production was underpinned by consistent operating performance, and higher grades at some operations.
Chilean copper major Antofagasta has had a good June 2019 qtr (Q2 19) with copper production up 5% on Q1 19 to 198,600t and gold 39.7% better to 86,900oz.
The result was expected, with higher production from all operations and increased grades, particularly at 70%-owned Centinela. Molybdenum, however, eased 500t to 3,000t. Cash costs, before by-product credits, were also better down 4.7% to $US1.62/lb and net cash costs down 8.1% to $1.14/lb, due to the company’s recently invoked productivity programme.
The Pakistan govt has expressed its willingness to discuss a settlement with global miners Barrick Gold and Antofagasta, after being ordered to pay $US6B damages over the denial of a mining lease at their Tethyan Copper JV’s massive Reko Diq copper-gold project eight years ago.
After finding against Pakistan in 2017, the International Centre for Settlement of Industrial Disputes has now set damages in the case.
Higher throughput and the anticipated improved grades particularly at its 70%-owned Centinela mine have helped Chilean copper major Antofagasta meet expectations with total production of 188,600t in the March qtr (Q1).
The result was below its Q4FY2018 production of 220,000oz, but CEO Iván Arriagada says that was a reflection of the large increases through the prior year.
“We are on-track for another record-setting year with full year production expected to increase by up to 9% to 750,000-790,000t,” he says.