Antofagasta H1 copper output falls, costs high
miningweekly.com
By: Reuters
30th July 2009
LONDON - Chilean copper miner Antofagasta on Thursday posted a 6,6% fall in first-half copper output, slightly better than its own expectations, and said costs remained sharply higher than last year. The London-listed firm said group cash costs in the second quarter stayed at the same level of as in the first quarter, up 35% from 2008.
"The market will be disappointed that costs have remained unchanged at 97.5 cents/lb... there will have to be good progress made in H2 if the market is not to be disappointed," said analyst Jon Bergtheil at Citigroup.
Consensus expectations for the year for unit costs are 87 cent per pound, he added.
Costs have surged partly due to reduced byproduct credits for molybdenum, which has seen steep price declines.
Investors appeared to focus more on Antofagasta's exposure to the copper price, which recovered on Thursday, as shares gained 6,1 percent to 752 pence by 1053 GMT. This compared to a 4,8 percent increase in the UK mining index.
Benchmark copper prices on the London Metal Exchange were up at $5 512 per ton by midday, up 1,8 percent from Wednesday's close.
Demand for copper, mainly used in construction and manufacturing, withered during the economic downturn and are still about 40 percent below last year's peak despite a strong rally this year.
Antofagasta posted a 68 percent slide in first quarter core earnings on May 28 due to the weaker prices.
OUTPUT FALLS
The company, which owns three copper mines in Chile, said copper production for the six months to the end of June fell to 218 200 t from 233 600 t in the same period last year.
"Production decreased ... mainly due to lower throughput partly offset by slightly higher ore grades and metallurgical recoveries at Los Pelambres," the company said in a statement, referring to its flagship mine.
The company said the copper production figures were "slightly ahead of budget", without giving further details.
The first-half output figure represents about half the full year production target of 433 000 t, down 9,4 percent from the previous year, which the firm reiterated on April 30.
The company has said annual output would decline mainly due to lower grades at the Los Pelambres mine.
Antofagasta, which is majority owned by Chile's Luksic family, said its expansion project at Los Pelambres and development of the new Esperanza mine were both on schedule. |
