Chilean miner Antofagasta on Wednesday reported a 10.4% fall in 2022 copper output, as lower ore grades and a drought in Chile continued to hurt production.
The London-listed company said it produced 646,200 tonnes of copper last year, at the lower end of its outlook of 640,000 tonnes-660,000 tonnes.
“The recent strength in the copper market is a positive start to the year, reflecting not just the relaxation of covid restrictions in China and its expected stronger growth, but also the fundamental long-term importance of copper and the need for increased supply,” said chief executive Iván Arriagada in a statement.
Copper usage is expected to increase in the global move toward green energy and electrification.
Antofagasta, which operates four copper mines in Chile, the world’s largest producing country, expects production in 2023 will increase to between 670,000 and 710,000 tonnes with net cash costs of $1.65/lb, from $1.61 in 2022.
Unit cost guidance is higher than consensus expectations, reflecting cost pressures for copper mining in Chile, Citi analysts said in a note.
The miner sees capital expenditure of $1.9 billion this year, unchanged from 2022, hit by inflation and higher costs for its mine development and desalination expansion at Centinela and Los Palambres operations.
(By Clara Denina and Muhammed Husain; Editing by Subhranshu Sahu and Louise Heavens)