Antofagasta flags fuel, sulfuric acid costs as chief risks despite steady operations

Chilean miner Antofagasta Minerals said rising fuel and sulfuric acid costs are its biggest near-term concerns, even as its operations and project pipeline continue to advance steadily, chief executive Ivan Arriagada told Reuters.

Higher oil prices, and the resulting rise in fuel costs, are the company’s main concern on the cost front, Arriagada said in an interview on Monday.

“We have also seen increases in the price of some inputs – sulfuric acid, explosives, and to some extent energy as well,” he said. “That is happening in a context where the copper price, while it has fallen, has generally remained at a favorable level.”

Arriagada said the company has long-term contracts covering sulfuric acid, which it uses in a small portion of its operations.

Still, he said Antofagasta is watching the market closely as the delivered price of sulfuric acid in Chile has risen. Chile is a net importer of the input for the copper industry, and global market conditions have altered trade flows, he added.

“We are closely monitoring developments in the market,” Arriagada said. “If this worsens and supply shortages increase, it could affect us.”

(By Fabian Cambero; Editing by Chris Reese)