TIDMANTO
RNS Number : 8788Y
Antofagasta PLC
19 January 2022
NEWS RELEASE, 19 JANUARY 2022
Q4 2021 PRODUCTION REPORT
FULL YEAR GUIDANCE ACHIEVED
Antofagasta plc CEO, Iván Arriagada said: " Despite external
pressures, such as the ongoing drought in Chile, higher input costs
and global supply chain challenges, the Company has successfully
achieved its production and cost guidance for the year with copper
production at 721,500 tonnes and net cash costs of $1.20/lb.
"In 2022 we expect copper production to be 660-690,000 tonnes at
a net cash cost of $1.55/lb as grades decrease at Centinela
Concentrates and the drought continues to impact Los Pelambres.
However, we have a long-term solution to the water shortage which
will come in the second half of the year when our desalination
plant is commissioned.
"Our unit costs will be temporarily affected by the decrease in
production in 2022 combined with increases in input prices,
particularly acid. However, through our Cost and Competitiveness
Programme, improving operational effectiveness and innovation we
will continue to control costs tightly in the short-, medium- and
long-term.
"In the meantime, the demand picture for copper continues to be
strong as copper is essential to economic activity and green
investment initiatives such as electric vehicles, infrastructure
and renewable energy."
HIGHLIGHTS
PRODUCTION
-- Group copper production for the full year was 721,500 tonnes,
within the guidance range and 1.7% lower than last year mainly on
expected higher grades at Centinela Concentrates, offset by
expected lower grades and lower throughput at Los Pelambres
-- Group copper production in Q4 2021 was 178,900 tonnes, 1.2%
lower than in the previous quarter as lower water availability
impacted throughput at Los Pelambres by 13.6%, mainly as a result
of the previously advised drought
-- Gold production for the full year was 252,200 ounces, 23.6%
higher than in 2020 on higher grades at Centinela. Quarterly
production decreased by 2.8% to 64,900 ounces on lower throughput
at Los Pelambres
-- Molybdenum production in the quarter was 2,100 tonnes, 500
tonnes lower than in the previous quarter on lower throughput at
Los Pelambres. For the full year, production was 10,500 tonnes,
16.7% lower than in 2020 on lower grades at Los Pelambres and
Centinela
CASH COSTS
-- Cash costs before by-product credits in 2021 were $1.79/lb,
14.7% higher than last year due the stronger Chilean peso (4%),
higher energy and diesel prices, and lower production
-- Cash costs before by-product credits in Q4 2021 were
$1.92/lb, 13c/lb higher than in Q3 2021 due to higher input prices
and the lower production at Los Pelambres
-- Net cash costs for the full year were $1.20/lb, below
guidance and 5.3% higher than in 2020 due to higher cash costs
before by-product credits partially offset by the 17c/lb increase
in by-products credits on increased gold production and realised
molybdenum price
-- Net cash costs in Q4 2021 were $1.35/lb, 19c/lb higher than
in the previous quarter, reflecting the higher cash costs before
by-products credits and the decrease in by-products credits
2022 GUIDANCE
-- Group production in 2022 is expected to be 660-690,000 tonnes
of copper (as previously announced), 170-190,000 ounces of gold and
8,500-10,000 tonnes of molybdenum. The copper and gold production
reflect lower expected grades at Centinela Concentrates and the
temporarily reduced throughput at Los Pelambres because of the
continued drought. It assumes there is no precipitation until the
rainy season and the desalination plant starts operating in H2
2022. Copper production is expected to increase quarter on quarter
throughout the year
-- Group cash costs in 2022 before and after by-product credits
are expected to be $2.00/lb and $1.55/lb respectively, reflecting
increased input costs, especially sulphuric acid (up 125%) at our
cathode operations, and lower production at the Group's two lowest
cost operations, namely Los Pelambres and Centinela Concentrates.
By-product credits are also expected to decrease as gold and
molybdenum production falls
-- Capital expenditure in 2022 is expected to be $1.7-1.9
billion, as sustaining and mine development expenditure increase
for the year to approximately $1.0 billion, and development
expenditure continues on the Los Pelambres Expansion project and at
Centinela, including the ongoing study and review work on the
second concentrator. The final estimated capital expenditure to
complete the Los Pelambres Expansion remains under review due
primarily to COVID-19 impacts.
GROWTH PROJECTS UPDATE
-- As at the end of 2021 the Los Pelambres Expansion project was
68% complete (design, procurement and construction). The final
estimated project costs are under review, considering the impact of
COVID-19, higher input and logistics costs and project workers
absenteeism. The completion schedule for the water supply system
remains unchanged and is expected in H2 2022. For the concentrator
plant expansion, which has the highest number of workers and was
most affected by absenteeism, completion is now planned for the
beginning of 2023
-- At Zaldívar construction of the Chloride Leach project was
completed during January 2022 and is now being commissioned
SUSTAINABILITY
-- In December, the Company released its inaugural Climate
Change Report which set out its progress and plans for fulfilling
its Climate Change Strategy. This included its approach to
achieving the previously announced emission reduction targets, as
well as the Group's adaption initiatives, the evaluation of the
physical risks of climate change, transition risks and the
management of critical resources such as water and energy, all with
full regard of the impact on the Group's stakeholders. Climate
change considerations are integrated into the Group's business
decision making processes including using an internal carbon
price
-- The Company also released a Social Management Report in December
OTHER
-- A three-year labour agreement was agreed with one of the
workers unions at Centinela in December, six months earlier than
originally scheduled. During 2022 negotiations are scheduled with
the supervisors' unions at Zaldívar (August), Los Pelambres
(October) and Antucoya (November), and with the workers' union at
Antucoya (September).
GROUP PRODUCTION AND CASH COSTS Year to Date Q4 Q3
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Copper production kt 721.5 733.9 (1.7) 178.9 181.1 (1.2)
Copper sales kt 725.6 738.5 (1.7) 197.2 182.3 8.2
Gold production koz 252.2 204.1 23.6 64.9 66.8 (2.8)
Molybdenum production kt 10.5 12.6 (16.7) 2.1 2.6 (19.2)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.79 1.56 14.7 1.92 1.79 7.3
Net cash costs (1) $/lb 1.20 1.14 5.3 1.35 1.16 16.4
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Cash cost is a non-GAAP measure used by the mining industry
to express the cost of production in US dollars per pound of copper
produced.
Investors - Media - London
London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Rosario Orchard rorchard@antofagasta.co.uk
Telephone +44 20 7808 0988 Media - Santiago
Pablo Orozco porozco@aminerals.cl
Carolina Pica cpica@aminerals.cl
Telephone +56 2 2798 7000
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MINING OPERATIONS
Los Pelambres
Copper production at Los Pelambres during the quarter was 74,300
tonnes, 8.4% lower than in the previous quarter as throughput
reduced by 13.6%. This was primarily due to decreased plant
run-time because of operational measures taken to optimise the use
of water and major maintenance during the quarter.
For the full year, copper production was 324,700 tonnes, 9.7%
lower than last year. This decrease was mainly due to the lower
throughput due to water optimisation and expected lower copper
grade.
Molybdenum production was 1,800 tonnes in Q4 2021, 600 tonnes
lower than in the previous quarter, and for the full year was 9,200
tonnes, 15.6% lower than in 2020 because of lower throughput,
grades and recoveries.
Cash costs before by-product credits in Q4 were $1.74/lb, 8.7%
higher than in previous quarter. For the full year cash costs
before by-product credits were $1.59/lb, 25.2% higher than 2020.
This was due to the lower production due to water restrictions, the
stronger Chilean peso, higher input prices and the payment of a
one-off signing bonus following the successful completion of a new
3-year labour agreement.
Net cash costs for the quarter were $1.12/lb, 31c/lb higher that
Q3 as molybdenum production fell by 25.0%. For the full year net
cash costs were $0.89/lb, 8c/lb higher than in 2020, due to higher
by-product credits driven by higher realised prices offset by
higher cash costs before by-product credits.
The labour agreement with the supervisors' union expires in
October 2022.
Major maintenance scheduled in Q1 and Q2 2022 is included in
full year guidance.
LOS PELAMBRES Year to Date Q4 Q3
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 155.5 161.9 (3.9) 136.6 158.0 (13.6)
Copper grade % 0.66 0.70 (5.9) 0.67 0.64 4.1
Copper recovery % 90.3 90.0 0.3 91.8 90.3 1.6
Copper production kt 324.7 359.6 (9.7) 74.3 81.1 (8.4)
Copper sales kt 324.5 366.0 (11.3) 89.9 69.1 30.1
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.019 0.021 (7.9) 0.018 0.018 0.8
Molybdenum recovery % 84.5 85.6 (1.3) 85.1 83.9 1.5
Molybdenum production kt 9.2 10.9 (15.6) 1.8 2.4 (25.0)
Molybdenum sales kt 9.2 10.8 (14.8) 2.2 2.1 4.8
Gold grade g/t 0.044 0.047 (7.0) 0.043 0.037 15.0
Gold recovery % 71.8 73.0 (1.7) 74.5 83.0 (10.2)
Gold production koz 53.2 60.3 (11.8) 11.8 13.4 (11.9)
Gold sales koz 51.1 58.4 (12.5) 14.2 11.1 27.9
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.59 1.27 25.2 1.74 1.60 8.7
Net cash costs (1) $/lb 0.89 0.81 9.9 1.12 0.81 38.3
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.15/lb in Q4 2021, $0.17/lb in
Q3 2021, $0.15/lb FY 2021 and $0.18/lb FY 2020
Centinela
Centinela had a solid year in 2021 with increased production and
lower costs with higher sulphide grades and increased
throughput.
Production for 2021 was 274,200 tonnes, 11.1% higher than in
2020, due to higher grades and increased throughput at Centinela
Concentrates which operated at design capacity for the full year.
During Q4 Centinela produced 71,400 tonnes of copper, 1.0% higher
than in the previous quarter.
For the full year, copper in concentrate production was 185,400
tonnes, 20.7% higher than in 2020, reflecting expected higher ore
grades and throughput over 105 ktpd. Production for the quarter was
47,400 tonnes, 0.4% lower than in Q3.
Full year copper cathode production was 88,800 tonnes, 4.8%
lower than in 2020 mainly due to expected lower grades and
recoveries, despite higher throughput. Cathode production during
the quarter was 24,000 tonnes, 3.6% higher than Q3 2021 primarily
on higher ore grades partially offset by lower throughput.
Gold production for the full year was 199,000 ounces, 38.5%
higher than in 2020, due to higher throughput and grades. For the
quarter, production was 53,100 ounces, 0.6% lower than the previous
quarter on lower grades.
Cash costs before by-product credits for the full year were
$1.87/lb, 2c/lb higher than in 2020 as the impact of higher copper
production was offset by the stronger Chilean peso and higher input
costs. Cash costs before by-product credits were $2.00/lb in Q4
2021, 7.5% higher than in the previous quarter.
For the full year, by-product credits were $0.74/lb, 16c/lb
higher than in 2020 due to higher gold production and the improved
molybdenum price. In Q4 by-product credits increased by 5c/lb
compared with Q3 as molybdenum production increased, although the
price declined.
During the full year net cash costs were $1.13/lb, 14c/lb lower
than 2020 due to higher by-product credits driven by higher gold
production offset by higher cash costs before by-product credits.
Net cash costs in Q4 were $1.23/lb, 7.9% higher than in the
previous quarter.
In 2022 the average mined grade and recoveries at Centinela
Concentrates will decline, partly offset by higher grades at
Centinela Cathodes. Total production is expected to be 245-255,000
tonnes.
A labour negotiation with the largest of the workers' unions was
successfully concluded during the quarter, before the deadline in
May 2022. There will be no further negotiations at Centinela during
2022.
Major maintenance scheduled in Q1 and Q3 2022 is included in
full year guidance.
CENTINELA Year to Date Q4 Q3
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 105.1 97.0 8.4 110.8 100.3 10.4
Copper grade % 0.60 0.53 12.0 0.59 0.62 (4.7)
Copper recovery % 84.8 84.5 0.3 84.9 84.9 (0.0)
Copper production kt 185.4 153.5 20.7 47.4 47.6 (0.4)
Copper sales kt 187.7 152.7 23.0 50.6 56.3 (10.0)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.009 0.012 (21.2) 0.010 0.008 27.2
Molybdenum recovery % 47.9 38.6 24.0 46.2 43.8 5.5
Molybdenum production kt 1.3 1.7 (23.5) 0.4 0.2 100.0
Molybdenum sales kt 1.2 1.7 (29.4) 0.2 0.2 0.0
Gold grade g/t 0.24 0.19 28.5 0.25 0.26 (7.1)
Gold recovery % 71.0 70.6 0.5 70.4 69.1 1.8
Gold production koz 199.0 143.7 38.5 53.1 53.4 (0.6)
Gold sales koz 193.5 141.2 37.0 54.2 61.4 (11.7)
------ ------ ------- ------ ------ -------
CATHODES
Daily ore throughput kt 57.8 56.9 1.6 57.8 60.7 (4.9)
Copper grade % 0.62 0.64 (3.6) 0.64 0.61 5.8
Copper recovery % 65.6 67.6 (2.9) 67.4 64.9 3.9
Copper production - heap
leach kt 85.3 89.0 (4.2) 23.3 22.2 4.7
Copper production - total
(1) kt 88.8 93.3 (4.8) 24.0 23.2 3.6
Copper sales kt 88.4 95.0 (7.0) 24.8 25.0 (0.9)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 274.2 246.8 11.1 71.4 70.7 1.0
Cash costs before by-product
credits (2) $/lb 1.87 1.85 1.1 2.00 1.86 7.5
Net cash costs (2) $/lb 1.13 1.27 (11.0) 1.23 1.14 7.9
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.13/lb in Q4 2021, $0.10/lb in
Q3 2021, $0.12/lb FY 2021 and $0.14/lb FY 2020
Antucoya
Production for the full year was 78,600 tonnes, 0.9% lower than
last year due to higher throughput, offset by expected lower grades
and resulting lower recoveries. During Q4 production was 20,900
tonnes, 14.2% higher than the previous quarter as throughput,
grades and recoveries increased.
During the quarter, cash costs were $2.02/lb compared to
$2.06/lb in Q3. For the full year cash costs were $2.04/lb, 12.1%
higher than in 2020 due to a stronger Chilean peso, and higher
input costs and maintenance expenditure.
In 2022, the labour agreement with the supervisor's union
expires in November.
Major maintenance scheduled in Q1 and Q3 2022 is included in
full year guidance.
ANTUCOYA Year to Date Q4 Q3
--------------------- ----- -----
2021 2020 % 2021 2021 %
---------------------- ------ ----- ----- ------- ----- ----- ------
Daily ore throughput kt 85.5 76.0 12.5 91.1 82.9 9.9
Copper grade % 0.34 0.38 (10.2) 0.35 0.33 4.1
Copper recovery % 69.1 73.7 (6.3) 71.3 67.9 5.0
Copper production kt 78.6 79.3 (0.9) 20.9 18.3 14.2
Copper sales kt 80.4 76.5 5.1 19.9 20.3 (2.0)
---------------------- ------ ----- ----- ------- ----- ----- ------
Cash costs $/lb 2.04 1.82 12.1 2.02 2.06 (1.9)
---------------------- ------ ----- ----- ------- ----- ----- ------
Zaldívar
Attributable copper production for the year was 44,000 tonnes,
8.7% lower than in 2020 mainly due to expected lower grades,
partially offset by higher throughput. During the quarter Zaldívar
produced 12,400 tonnes of copper, 12.7% higher than in the previous
quarter on higher grades, recoveries and throughput.
Cash costs during the quarter were $2.31/lb and for the full
year were $2.39/lb, compared with $1.80/lb in 2020, mainly due to
lower grades, higher maintenance costs and the stronger Chilean
peso.
In 2022, the labour agreement with the supervisor's union
expires in August.
Major maintenance scheduled in Q1 and Q3 2022 is included in
full year guidance.
ZALDÍVAR Year to Date Q4 Q3
--------------------- ----- -----
2021 2020 % 2021 2021 %
--------------------------- ------ ----- ----- ------- ----- ----- ------
Daily ore throughput kt 44.4 39.3 12.9 48.6 48.0 1.3
Copper grade % 0.74 1.02 (27.5) 0.77 0.65 17.6
Copper recovery (1) % 53.5 50.1 6.8 53.5 52.9 1.2
Copper production - heap
leach (2) kt 32.0 36.6 (12.4) 9.1 7.7 17.8
Copper production - total
(2,3) kt 44.0 48.2 (8.7) 12.4 11.0 12.7
Copper sales (2) kt 44.6 48.3 (7.7) 12.0 11.6 3.4
Cash costs $/lb 2.39 1.80 32.8 2.31 2.34 (1.3)
----- ----- ----- -----
(1) 12-month rolling recoveries
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q4 were 1.8 million tonnes, 0.5%
higher than the previous quarter. For the full year, transport
volumes increased by 4.0% to 6.7 million tonnes as a new transport
contract started.
TRANSPORT Year to Date Q4 Q3
---------------------- ------ ------
2021 2020 % 2021 2021 %
--------------------------- ---- ------ ------ ------ ------ ------ ------
Rail kt 5,222 4,847 7.7 1,338 1,370 (2.3)
Road kt 1,481 1,597 (7.3) 422 381 10.8
Total tonnage transported kt 6,702 6,444 4.0 1,760 1,751 0.5
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q4 Q3
---------------------- ------ ------
2021 2020 % 2021 2021 %
------ ------ ------ ------ ------
Copper
Market price $/lb 4.23 2.80 51.1 4.40 4.25 3.5
Realised price $/lb 4.37 2.98 46.6 4.65 3.99 16.5
---------------- ------ ------ ------ ------ ------ ------ -------
Gold
Market price $/oz 1,799 1,770 1.6 1,795 1,790 0.3
Realised price $/oz 1,788 1,797 (0.5) 1,812 1,781 1.7
---------------- ------ ------ ------ ------ ------ ------ -------
Molybdenum
Market price $/lb 15.9 8.7 82.8 18.9 19.0 (0.5)
Realised price $/lb 17.4 8.8 97.7 18.1 20.2 (10.4)
---------------- ------ ------ ------ ------ ------ ------ -------
Exchange rates
per
Chilean peso $ 760 792 (4.0) 826 773 6.9
---------------- ------ ------ ------ ------ ------ ------ -------
Spot commodity prices for copper, gold and molybdenum as at 31
December 2021 were $4.40/lb, $1,820/oz and $18.7/lb respectively,
compared with $4.10/lb, $1,737/oz and $18.5/lb as at 30 September
2021 and $3.51/lb, $1,891/oz and $10.0/lb as at 31 December
2020.
The provisional pricing adjustments for copper, gold and
molybdenum for the full year were positive $352.5 million, negative
$10.8 million and positive $37.6 million respectively.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were positive $150.9 million, negative
$0.5 million and negative $9.4 million respectively.
Exceptional item
During 2021 there was an exceptional item of $91 million which
reflects the recognition of a deferred tax asset at Antucoya, due
to the increased consensus copper price forecasts resulting in
higher forecast taxable profits.
2022 Guidance
Los Pelambres Centinela Antucoya Zaldívar Group
-------------- ---------- ---------
Production
Copper kt 290 - 300 245 - 255 75 - 80 50 - 55 660 - 690
Gold koz 40 - 50 130 - 140 - - 170 - 190
Molybdenum kt 6.5 - 7.5 2.0 - 2.5 - - 8.5 - 10.0
------------------------ ------ -------------- ---------- --------- -------------- -----------
Grade
Copper % 0.64% 0.57% 0.36% 0.75% -
------------------------ ------ -------------- ---------- --------- -------------- -----------
Cash costs
Cash costs before
by-product credits(1) $/lb 1.75 2.30 2.30 2.20 2.00
Net cash costs (1,
2) $/lb 1.25 1.60 2.30 2.20 1.55
------------------------ ------ -------------- ---------- --------- -------------- -----------
(1) Assumed CLP/USD exchange rate of 810
(2) Includes by-product credits at a gold price of $1,800/oz and
a molybdenum price of $15.0/lb
As previously announced, copper production for 2022 is expected
to be 660-690,000 tonnes as grades decrease at Centinela
Concentrates and the temporarily reduced throughput at Los
Pelambres because of the drought. It assumes there is no
precipitation until the rainy season and the desalination plant
starts operating in H2 2022. Copper production is expected to
increase quarter on quarter throughout the year.
Gold production for 2022 is expected to be 170-190,000 ounces,
as grades decrease at Centinela Concentrates.
Molybdenum production is expected to be 8,500-10,000 tonnes, as
a result of lower grades at Los Pelambres.
Group cash costs in 2022 before and after by-product credits are
expected to increase to $2.00/lb and $1.55/lb, respectively
reflecting increased input costs, especially sulphuric acid (up
125%) at our cathode operations, and lower production at the
Group's two lowest cost operations, namely Los Pelambres and
Centinela Concentrates. By-product credits are also expected to
decrease as gold and molybdenum production falls.
In 2022 consolidated Group capital expenditure, which excludes
Zaldívar, is expected to be $1.7-1.9 billion, as sustaining and
mine development expenditure for the year increase to approximately
$1.0 billion, and development expenditure continues on the Los
Pelambres Expansion project and at Centinela, including the ongoing
study and review work on the second concentrator. The final
estimated capital expenditure to complete the Los Pelambres
Expansion remains under review due primarily to COVID-19
impacts.
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