Antofagasta H1 profit drops due to lower Cu production and higher costs
Chile-based miner Antofagasta, one of the world’s major copper producers, has announced its copper production in H1 2022 was 268,600 tonnes, 25.7% lower than in the same period last year.
The company said that the decrease in copper production was mainly due to the expected temporary reduction in throughput at Los Pelambres as a result of the drought and the concentrate pipeline incident and expected lower grades at Centinela Concentrates.
Cash costs before by-product credits for the first half of the year were $2.37/lb, 37.0% higher than in the same period last year mainly due to the temporary decrease in production and higher input prices, particularly for diesel and sulphuric acid. Revenue for the first half of 2022 was $2,528 million, 29.6% lower than the same period in 2021 mainly because of lower copper and by-product sales volumes and lower realized copper prices.
EBITDA was $1,238 million, 47.5% lower than in the same period last year on lower revenue and operating costs that increased by 6.9% mainly due to higher input prices. Profit before tax was $680 million, a $1,104 million or 62% decrease on the same period in 2021. Earnings per share were 26.4 cents, 41.1 cents lower than the same period in 2021.
Antofagasta said that it remains on track to produce its revised guidance of 640-660,000 tonnes of copper for the full year. This includes the impact of the concentrate pipeline incident, and the impact of the water shortage at Los Pelambres due to the drought.
CEO Iván Arriagada commented, “Sales volumes during the period were lower as were copper prices and this is reflected in the 30% decline in revenue. As we previously announced, with the fall in production and higher input prices, cash costs were higher. And although we have experienced general inflation, the impact was offset by the weak Chilean peso.
“We expect the remainder of the year to look very different from the first half – as production improves quarter-on-quarter, we ship and sell the concentrate that was impacted by the concentrate pipeline incident, and the desalination plant at Los Pelambres starts, significantly alleviating the issue of water availability.”
Antofagasta operates four mines in Chile: Los Pelambres, Centinela, Antucoya and Zaldívar. All of the company’s mines are open pit operations.
