Codelco profit hit by lower copper prices and sales

(Image courtesy of Codelco | Flickr.)

Chile’s Codelco, the world’s largest copper producer, posted a 73% drop in its pre-tax profit for the first three months of this year, which the company said was primarily due to both lower prices and sales volumes.

Codelco’s pre-tax profit totaled $418 million in the January-to-March period, the company said in a filing to Chile’s main stock exchange on Tuesday.

The state-owned miner said copper output totaled 326,000 tonnes during the quarter, down 10.4% from the same period last year.

Average copper sales prices during the quarter fell 9.4%, the company said, while sales volumes fell about 1.7% during the period, compared with the first quarter of last year.

Codelco’s direct production costs rose nearly 34% to about $204 per pound, from $153 the year before, due to higher operating costs as well as higher input prices.

The company said lower production at its Ministro Hales, Andina and Chuquicamata mines was caused by various operational problems, including a mill motor failure and concentrator feed contingencies, according to the quarterly filing.

Last week, Codelco said it saw greater synergies with its Andina mine and Anglo American’s neighboring Los Bronces mine after an environmental permit was approved, paving the way for a $3.3 billion project extension.

In March, Codelco forecast copper prices between $3.5 and $4.4 per pound in 2023. The company also said it expects capital expenditures between $3.5 billion and $4.125 billion for the year.

Chief executive Andre Sougarret said in a statement that he expects gradual progress from 2024 through the end of the decade, as production gains are achieved.

“It’s a complex transition time, between deposits that are running out and projects that are coming online,” he said.

Prices for copper, often seen as a bellwether for the global economy, have been helped by optimism over recovering Chinese demand, though worries about economic recession have curbed gains.

(By Carolina Pulice, Marion Giraldo and Sarah Morland; Editing by David Alire Garcia and Leslie Adler)


Your email address will not be published. Required fields are marked *