Antofagasta copper output falls but keeps 2020 guidance

Antofagasta attributed the output decrease to a precautionary suspension of the Los Pelambres expansion project as well as to lower grades at its Antucoya mine.

The company, which has four copper operations in Chile, kept production targets for 2020 at between 725,000 and 755,000 tonnes of copper, but warned it expected annual production to be at the lower end of the guidance.

Copper output of 541,300 tonnes for the year to date is 7.3% lower than in the same period last year, it noted.

Antofagasta also said net cash costs would likely fall below the originally guided $1.20 per pound.

The company remains cautiously optimistic about the future. For 2021, it’s predicting an annual output of between 730,000 and 760,000 tonnes as grades increase at Centinela Concentrates and covid-19 health protocols remain in place.

Production of molybdenum — a by-product of copper mining — surged 9.7% in the quarter to 3,400 tonnes, while gold output fell 16.7% to 38,300 ounces.

Earlier this month, Antofagasta filed for an initial permit to develop the copper, nickel, cobalt and platinum group metals Twin Metals mine project in Minnesota, US. It’d be the company’s first mine outside Chile and a welcomed incursion into other high demand metals.

Chief executive officer Iván Arriagada estimates that around 200,000 tonnes of copper a year are used in electric mobility. By 2030, the figure could reach one million tonnes.

Copper demand for the renewable energy sector is also growing fast in a market which is already tight, the executive has said.

Minimal disruptions

Disruptions to mining operations in Chile, the world’s largest copper producer, have been minimal so far. However, companies including state-owned Codelco and BHP (ASX, LON, NYSE: BHP) have had to delay projects and pulled back on production.

Antofagasta noted that roughly 75% of the original planned numbers are now on site at its flagship Los Pelambres mine, with work also beginning at its Esperanza Sur and Zaldívar Chloride Leach projects.

Prices for the industrial metal, also used in renewables, climbed to a 28-month high on Tuesday, on the back of a US stimulus package, strikes-triggered worries about supply from Chile and robust Chinese economic growth. 

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