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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (84606)	8/23/2011 9:05:45 PM
From: LoneClone	Read Replies (1) \| Respond to of 193918

UPDATE 3-Copper prices lift Antofagasta to doubled dividend reuters.com Tue Aug 23, 2011 9:28am EDT * H1 net earnings $696.2 mln, within forecast range * Doubles dividend to 8 cents per share * Esperanza ramp-up on track (Adds comment on outlook, details) By Clara Ferreira-Marques LONDON, Aug 23 (Reuters) - Chilean copper miner Antofagasta doubled its half-year dividend after a 54 percent jump in earnings, confident that demand in China and a pickup in Japan and the United States would underpin copper prices in a volatile market. Copper is down over 10 percent this month as investors grow uneasy about recovery prospects, but falls have been modest in the context of battered markets. London-listed Antofagasta -- which has been hit by production setbacks and, like rivals, is suffering from higher costs -- said on Tuesday that prices for the red metal were likely to remain "volatile with downside risks", but said it was well-placed to weather the storm. "While markets are likely to remain volatile, especially in the near-term, we remain confident that copper fundamentals will remain supportive of a strong pricing environment," Chief Executive Marcelo Awad said. Antofagasta said Chinese demand remained strong over the period, with import declines largely reflecting the running down of stocks, and saw recovering demand in Japan and the United States. It also pointed to an underperforming supply side, hit by strikes and declines in ore grades, technical failures, the slow ramp-up of new projects and bad weather. The global copper market is expected to be in deficit this year, and Antofagasta quoted consensus expectations that output will fall short of demand by around 500,000 tonnes. The group, which also produces gold and molybdenum, used in steel alloys, said good demand, low stock levels and limited new supply were expected to fuel a recovery for molybdenum in the second half. Net earnings rose to $696.2 million over the period, within the range of analysts' forecasts, on revenues of $3.05 billion, up over 73 percent on the back of prices that have touched record highs. The group doubled its interim dividend to 8 cents per share but did not repeat its special dividend sweetener. "The positive was the big increase in the interim dividend and the fact none of that increase is a special dividend," said analyst Peter Mallin-Jones at Canaccord. "Management seem to be feeling pretty confident about the outlook and that is the biggest signpost of that confidence." Shares in Antofagasta, which have fallen less than those of its peers since the start of the recent equity rout, were flat at 1240 GMT at 1,213 pence, paring earlier gains as the market retreated and just below the broader UK sector . Core earnings before interest, tax, depreciation and amortisation (EBITDA) rose almost 84 percent to $1.95 billion, at the higher end of forecasts. But the group also joined rivals in warning of increased production costs, fuelled by higher energy and labour costs, higher sulphuric acid prices and the strength of the Chilean peso. It expects 2011 cash costs to be around 110 cents a pound, compared with 105.6 cents in the first half. "Going forward for the second half, we are expecting higher production and lower unit costs, but we do not foresee any change on energy or the Chilean peso, which will continue appreciating as the dollar gets weaker and weaker," Awad said. PRODUCTION ON TRACK The London-listed group was forced to cut its full-year production target in June due to slower-than-expected progress at expansion project Esperanza, but it again confirmed the outlook on Tuesday and said the ramp-up at Esperanza would be complete by the end of this year. It also said the feasibility study for its Antucoya project in northern Chile was "substantially complete" and put the capital cost at $1.35 billion, marginally above expectations. Antofagasta, attractive to some investors because of its cash pile, said it has cash including liquid investments of $3.1 billion and net cash of $700 million at the end of June. The miner said this allowed it "the financial flexibility to take advantage of opportunities which may arise". In production data released earlier this month, Antofagasta posted a 17 percent increase in second-quarter output. Strikes, prompted by high metals prices, have dented production from many major projects this year. Antofagasta pointed to nearly nil growth in mine production during the first half because of disruptions. (Editing by David Cowell)