Antofagasta blames poor copper production as revenue falls

Antofagasta blames poor copper production as revenue falls

Antofagasta PLC on Tuesday bemoaned poor copper production and prices and the impact of inflation on costs, as it reported a drop in both profit and revenue in 2022.

For 2022, the London-based, Chile-focused mining group reported pretax profit of USD2.56 billion, down 26% from USD3.48 billion a year prior. Revenue also fell, down 22% to USD5.86 billion from USD7.47 billion the previous year.

Antofagasta attributed this to a 12% decrease in copper sales to 642,500 tonnes from 725,600, as well as a 12% decline in realised copper prices. It also noted the impact of inflation and higher input prices.

Group copper production for the year was 646,200 tonnes, 10% lower than last year, while gold production was 176,800 ounces, down 30%.

Chief Executive Officer Ivan Arriagada said this reflected “the expected continuing drought in Chile and the effects of increased input prices, and the pipeline incident at Los Pelambres”.

In June, the company reported a leak in the underground pipeline at Los Pelambres that transports concentrate from the concentrator plant to the port at Los Vilos. The pipeline was immediately shut down and the location of the leak identified.

At the time, full access to the site was being blocked by members of the local community who were in discussion with the local authorities and representatives of the company. Antofagasta was not able to complete repairs until it regained access to the site.

In December, the company yet again told investors that access to Los Pelambres was being blocked by a small group of people, “without any connection to any specific incident or situation, but who are requesting compensation to clear access”. It said work at the development was reduced as a result.

Antofagasta now expects 2023 copper output to be between 670,000 tonnes and 710,000 tonnes; and gold between 220,000 ounces and 240,000 ounces.

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