Antofagasta trims costs forecast as Q3 copper output rises

Los Pelambres, which remains Antofagasta’s flagship mine. (Image courtesy of Antofagasta PLC)

LONDON, Oct 25 (Reuters) – Chilean copper miner Antofagasta on Wednesday posted an increase in quarterly production on a better performance at its Los Pelambres mine and said cash costs for the year will be lower than previous estimates.

Copper output in the third quarter rose 3.3 percent to 180,000 tonnes compared with the previous quarter while net cash costs rose 9.3 percent to $1.18 per pound, the miner said.

Prices for copper, jumped to a three-year high last week and rose nearly 10 percent in the third quarter on a rosier outlook for the economy of top consumer China.

Los Pelambres, Antofagasta’s largest mine, produced softer ore and slightly better grades in the quarter which led to higher production.

Despite the quarterly increase in net cash costs Antofagasta said the 2017 costs would be below the $1.30 per pound previously forecast, without giving a specific figure.

The company expects 2018 production to total between 705-740,000 tonnes. Production and spending estimates for the current year were unchanged.

However, the shares were down 2.7 percent at 1003 pence in early trading on Wednesday. With the price of copper up sharply Antofagasta’s share price has risen nearly 50 percent this year.

BMO Capital Markets analyst Edward Sterck said the company’s performance in the quarter was strong but its forecast for 2018 was slightly weaker than expected.

(Reporting by Zandi Shabalala in London and Sanjeeban Sarkar in Bengaluru; Editing by David Holmes, Greg Mahlich).

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