Antofagasta says Covid-19 spike could restrict workforce

Antofagasta said its mines were producing copper at or near expected levels but that a recent rise in new Covid-19 cases in Chile threatened to restrict its ability to move workers to and from sites.

In a statement to the company's annual general meeting Chairman Jean-Paul Luksic said about two-thirds of its workforce were at on-site and that it was "continuing to produce copper at or close to their originally expected levels of production".

He added: "A significant rise in the number of new Covid-19 cases since 13 May and the declaration of quarantine for all of the Santiago area on 15 May increases the risk of the company being restricted from moving its workforce to and from its operations."

Santiago, where Antofagasta is based, was put into a city-wide lockdown after a spike in infections that sent the country's cases of Covid-19 past 40,000. The increase threatens to overwhelm Chile's health system but food shortages caused by the lockdown have sparked clashes between poor citizens of Santiago and police.

Luksic said it was using social distancing, health monitoring and chartered transport to and from mines to help keep workers safe. It has largely suspended an expansion plan for its flagship Los Pelambres copper operation in Chile.

He said the price of copper had picked up slightly from its decline to $2.14 per pound in late March – a drop induced by the worsening outlook for the global economy.

"[the price] is now trading slightly higher in the $2.25-2.40 [per pound] range, and it is unclear how it will trade over the balance of the year given the potential for a worldwide recession," Luksic said. "However, in the longer term we continue to believe the fundamentals for copper are strong and that future demand will remain strong."

Luksic said Covid-19 had exacerbated Chile's existing social tensions and that politicians and business should work together to resolve the country's problems.

"When the mining industry is successful, the whole country benefits through higher tax revenues, higher levels of employment, better jobs and improved infrastructure," he said.