Antofagasta shares, half-year production hit by Los Pelambres pipeline blockage

Shares in Chilean miner Antofagasta Plc. (LON:ANTO) took a hit on Wednesday after the company announced it had found a blockage in the pipeline that carries copper concentrates from the Los Pelambres processing plant to nearby ports.

The company said it would take up to three months for stocks to return to normal, which will affect both projected output and sales in the six months ending June 30.

Production, measured as the quantity filtered at the port, is expected to be impacted by about 10,000 tonnes of copper, while sales would be hit by roughly 15,000 tonnes in the period.

Production, measured as the quantity filtered at the port, is expected to be impacted by about 10,000 tonnes of copper, while sales would be hit by roughly 15,000 tonnes in the six months ending June 30.

Antofagasta said the full-year effect won’t be significant as to change copper production guidance for 2018, which it kept at between 705,000 and 740,000 tonnes.

The blockage, said the miner, was discovered on April 19 during preventative maintenance, resulting in the immediate suspension of the pipeline.

There were no structural damages nor leaks reported, Antofagasta said, adding that the filtering of concentrates at the port of Los Vilos resumed on May 5.

Los Pelambres is Antofagasta’s biggest mine, producing 356,000 tonnes of copper last year.

The company said in April its first-quarter output had fallen by 10.5% compared to the previous year, mainly because of lower quality ore, but kept full-year output guidance unchanged.

Copper miners in mature markets, particularly in Chile, which is the world’s top producer of the red metal, have seen production costs rise as they need to dig deeper and process larger amounts of rock to obtain the same amount of copper they used to a decade ago.

Shares in the company dropped as low as 991.6 p at 9:35 AM local time after having reached 1,006.50 previous to the announcement. They recovered slightly in mid-afternoon trading at 997.20 p by 2:35PM London time.