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Codelco earnings dip in the first quarter

Keywords: Tags  Codelco, copper, Iván Arriagada, Anglo American Sur, El Abra, Metal Bulletin, Carolina Guerra

SÃO PAULO — Chilean copper miner Corporación Nacional del Cobre de Chile (Codelco) registered a 30-percent year-on-year fall in earnings in the first quarter of 2013, citing port strikes in Chile and weak copper prices.

The world’s biggest copper producer saw a delay in shipments of 60,000 tonnes of material due to a three-week strike at the Angamos port in northern Chile.

"We expect to normalize this delay in the second quarter," said Iván Arriagada, Codelco’s vice president of administration and finances.

Earlier this year, Chile’s finance minister said illegal strikes at Chile’s ports and mines put the country’s future growth at risk.

Earnings before interest, taxes, depreciation and amortization (Ebitda) stood at $1.34 billion in the quarter, down from $1.9 billion in the first quarter of 2012.

As for prices, the red metal’s average price was 4.5 percent lower year on year in the first quarter of 2013 at $3.598 per pound, according to Codelco.

Copper sales revenue totaled $2.66 billion, compared with $3.16 billion in the first quarter of last year.

Volumes sold totaled 359,000 tonnes in the quarter, down from 392,000 tonnes in the same quarter of 2012.

Production, by contrast, increased 9.4 percent to 428,000 tonnes, the miner reported. The figure includes 385,000 tonnes of copper produced by Codelco’s mines and 43,000 tonnes related to the company’s involvement in the El Abra and Anglo American Sur projects.

"In terms of costs, Codelco is driving a structural project aiming (at) increased productivity and cost containment, which is already showing its first positive results," the company said.

The company cited such cost-cutting measures as reducing the use of basic inputs, such as sulphuric acid, and explosives without impacting production, renegotiating third-party contracts and optimizing internal processes.

A version of this article was first published in AMM sister publication Metal Bulletin.

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