Antofagasta Cuts Copper Production Guidance, Warns on Costs -- Commodity Comment
By Jaime Llinares Taboada
Antofagasta PLC on Wednesday downgraded copper production and
cost guidance for 2022 after operational issues at Los Pelambres
and amid cost inflation for diesel and sulphuric acid. Here's what
the FTSE 100 copper miner had to say:
"Group copper production in Q2 2022 was 129,800 tonnes, a
decrease of 6.5% compared to the previous quarter, mainly due to
the previously announced concentrate pipeline incident at Los
Pelambres which reduced reported production during the period by
approximately 23,000 tonnes. Operation of the pipeline resumed by
the end of the period and 12,000 tonnes of copper in concentrates
stockpiled at the concentrator plant will be moved to the port by
"Group copper production in the first six months of the year was
268,600 tonnes, 25.7% lower than in the same period last year
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.
Throughput at Los Pelambres was 36.2% lower than in H1 2021, and
the grades at Centinela Concentrates were 25.4% lower"
"Gold production for the quarter decreased by 7.8% to 35,400
ounces compared with Q1 mainly due to the concentrate pipeline
incident, and for the first six months decreased by 38.8% to 73,800
ounces mainly due to expected lower grades at Centinela"
"Molybdenum production was 2,000 tonnes, the same as the
previous quarter. For the year to date, production was 4,000
tonnes, 31.0% lower than in the same period last year due to lower
throughput and grades at Los Pelambres"
"Cash costs before by-product credits in the quarter were
$2.40/lb, 6c/lb higher than in the first quarter and 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. General inflation was largely offset by the weaker Chilean
"Net cash costs were $1.90/lb in Q2 2022 and $1.82/lb for the
first half of the year, compared to $1.75/lb in the previous
quarter and $1.14/lb in the first half of 2021, reflecting the
increase in cash costs before by-product credits and slightly lower
by-product credits due to lower by-product production, partially
offset by higher realised prices"
"Full year copper production for the Group is revised downwards
to 640-660,000 tonnes. This revision mainly reflects the impact of
the pipeline incident and the continued uncertainty arising from
the water shortage at Los Pelambres"
"The drought has continued at Los Pelambres during the period
although there has been heavier precipitation in July. The revised
guidance range incorporates a low probability negative outlook for
water availability for the rest of the year. Strict water
management protocols remain in place to optimise water usage and
mitigate the impact of low water availability"
"With increases in diesel and other input prices, net cash cost
guidance is increased to $1.65/lb, assuming market consensus
estimates of by-product prices and the Chilean Peso exchange rate
are achieved for the rest of the year"
"As announced in April, Group capital expenditure for the year
is expected to be $1.9 billion"
Write to Jaime Llinares Taboada at email@example.com;
(END) Dow Jones Newswires
July 20, 2022 03:12 ET (07:12 GMT)
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