Chile’s Codelco copper output dips but company posts profit

Photo of Codelco sign outside of company building (File Image).

SANTIAGO, Nov 23 (Reuters) – Chilean state copper company Codelco said on Thursday it produced slightly less copper from January to September 2017 than it did in the same period a year ago but rebounded from a year-earlier loss as prices for the metal improved.

Codelco Chief Executive Nelson Pizarro said the company produced 1.24 million tonnes of copper in the January-to-September period, a 3 percent decline from the same period last year.

He added the company posted more than $1.6 billion in pretax profit for the first nine months of 2017 versus an $18 million pretax loss in the year-earlier period.

Direct cash costs through September rose to $1.32 per pound of copper from $1.27 in 2016 as declining ore grades – a problem in Chile for years – continued to take their toll.

Codelco, which transfers all its profits to the state and relies on capitalization and some debt issuance to fund its operations, is emerging from a prolonged rough patch after a collapse in copper prices in 2016 ate into earnings and scuttled near-term investment plans.

The price of copper has risen dramatically in recent months on strong Chinese demand and supply disruptions, among other issues. Codelco, like other copper miners, is reinstating projects that were earlier put on ice. {nL1N1KX15S}

At a news conference announcing the results, Pizarro said the state miner was in a strong position for 2018 following the refinancing of billions of dollars in debt earlier this year.

“Today, we are comfortable as we look forward to the coming year, knowing that it will not be necessary to tap debt markets,” Pizarro said.

Codelco, which ships about two-thirds of its copper to Asia, was the world’s top copper producer based on its annual output to June 2017, according to rating agency Moody’s.

The company says it plans to invest $4 billion annually to revamp its aging mines, expand abroad and keep output flowing.

(Reporting by Fabian Cambero; Writing by Dave Sherwood; Editing by Rosalba O’Brien and Peter Cooney).

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