Strong last quarter leads Antofagasta to record copper output in 2018

Los Pelambres, located 240 km north-east of Santiago, is Antofagasta’s flagship operation. (Image courtesy of Minera Los Pelambres.)

Chilean miner Antofagasta Plc. (LON:ANTO) ended 2018 on a very high note as it produced a record amount of copper in the final quarter of the year, which led it to post annual output at the higher end of its forecast.

The company, majority-owned by Chile’s Luksic family, one of the country’s wealthiest, churned out 220,000 tonnes of the red metal in the three months to December, up 16% from the previous quarter.

That brought total copper output for 2018 to 725,300 tonnes, the top end of its revised guidance, and 3% rise year-on-year.

Fourth-quarter production jumped to 220,000 tonnes from 177,800 tonnes a year earlier. That brought 2018 total output to 725,300 tonnes.

Antofagasta attributed the increase to higher-than-expected throughput at its Los Pelambres and Centinela mines, as well as to improved copper grades.

“Although variable grades can lead to production variability, the high throughput underlines a strong operating performance and should be well received,” BMO  Capital Markets said in a note to investors. The experts added that Antofagasta remained one of their “top picks” in the copper space.

“The Group’s operations have achieved an improved level of operating stability and we go into 2019 with real momentum for what we expect to be another record-setting year, with production increasing by up to 9% to 750-790,000 tonnes at a net cash cost of $1.30 per pound,” said chief executive Iván Arriagada in the statement.

This year, Antofagasta plans to spend a total of $1.2 billion, which would go partly towards the expansion of its flagship Los Pelambres mine. The operation, located about 200km north of Chile’s capital Santiago, already is responsible for about half of the company’s copper output.

In terms of production, Antofagasta predicts another record year with 750-790,000 tonnes of copper, 240-260,000 ounces of gold and 11,500-12,500 tonnes of molybdenum.

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