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Codelco’s 1st-half earnings tumble 28%

Keywords: Tags  Codelco, first half earnings, copper prices, Iván Arriagada, Carolina Guerro

SÃO PAULO — First-half earnings fell at Corporación Nacional del Cobre de Chile (Codelco) due to lower metal prices and higher costs.

The Chilean state-owned copper producer posted pre-tax profits of $1.8 billion, down 28 percent from $2.51 billion in the first six months of last year.

Revenue from copper sales fell 3.8 percent to $5.84 billion from $6.07 billion in the same comparison. Copper shipments increased 2.9 percent to 837,000 tonnes, but average copper prices fell 6.9 percent to $7,539 per tonne ($3.42 per pound) and cash costs increased 16.8 percent to $4.17 billion.

Codelco’s copper production totaled 843,000 tonnes in the first half, up 5 percent a year earlier.

"Production was affected by the weather, particularly at the Andina project, and a workers’ strike on April 9," said Ivan Arriagada, Codelco’s vice president of administration and finance. Lower ore grades at the Chuquicamata and Salvador divisions also affected production.

Codelco aims to increase total copper production to 2.5 million tonnes annually by 2021. The company’s main expansion projects are the 170,000-tonne-per-year Ministro Hales site—expected to start its production ramp-up by the end of the year—a new mining level at El Teniente and the construction of an underground level at Chuquicamata.

In July, the Chilean government approved a $1-billion earnings reinvestment for Codelco to support the miner’s plans. In addition, the company announced in August a $750-million bond issue to finance its investments.

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

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