Antofagasta earnings fall 28% on lower copper prices, higher operating costs

Chile's Antofagasta (LON:ANTO) earnings fell by 28% to $2.05 billion over the first nine months of the year, reflecting lower revenues and higher operating costs, the company's third-quarter results showed on Thursday.

Although copper production was up by more than four percent and sales of copper and gold increased, a 12.8% drop in realised copper prices dragged revenues down to $4.4 billion, compared with $4.85 in the same period in 2012.

The company attributes the rise in operating costs to higher energy bills at the Los Pelambres mine and higher mine movement costs at Esperanza, though the Esperanza mine is also credited with bumping up production during the first nine months of the year.

Antofagasta has four producing subsidiaries in Chile, and is in the process of reactivating its Antucoya copper project.

The company provided an update on the Antucoya, noting that it's on budget and on time with 44% total progress. With a $1.9 billion price tag, Antucoya is one of the copper industry's most capital-intensive projects. Last week the Chilean miner secured $650 million in loans from a group of international banks to help finance the development. Antofagasta put the project on hold at the end of 2012 and reactivated it in March. Production is expected to start in 2015.