Antofagasta backs FY guidance as third-quarter copper output falls

Chilean copper miner Antofagasta reported a decline in third-quarter production on Wednesday but backed its guidance for the full year.

Antofagasta said group copper production fell 4.6% from the previous quarter to 169,600 tonnes due to lower production at the Los Pelambres mine as a result of major maintenance work, and expected lower grades at Antucoya.

Copper production for the first nine months of the year was in line with expectations, down 7.3% on the same period a year ago at 541,300 tonnes, mainly on expected lower grades at Centinela Concentrates, partly offset by higher production at Centinela Cathodes.

Gold production was down 16.7% on the previous quarter to 38,300 ounces, while molybdenum output rose 9.7% to 3,400 tonnes.

The company maintained its copper production guidance for 2020 at the lower end of the original 725-755,000 tonnes range, and said net cash costs are now expected to be below $1.20/lb, assuming no material change to the exchange rate for the rest of the year.

For 2021, production is expected to be to 730-760,000 tonnes of copper, mainly as grades start to increase at Centinela Concentrates in the fourth quarter and assuming that Covid-19 health protocols remain in place for the whole year.

Chief executive officer Ivan Arriagada said: "Following the temporary and precautionary suspension of the Los Pelambres Expansion project in Q2, approximately 75% of the original planned numbers are now working on site and all Covid-19 protocols are being followed. Similarly, work has also started at the Esperanza Sur and Zaldívar Chloride Leach projects."