Antofagasta lowers FY copper guidance

Antofagasta produced 129,800 tonnes of copper in the second quarter, down 6.5% quarter-on-quarter, mainly due to the aforementioned concentrate pipeline incident, while gold production slipped 7.8% to 35,400 ounces and molybdenum production was 2,000 tonnes, the same as the previous quarter.

For the first half, Antofagasta said it produced 268,600 tonnes of copper at a net cash cost of $1.82 per pound, while gold production slumped 38.8% to ounces, mainly due to expected lower grades at Centinela, and year-to-date molybdenum production sunk 31% to 4,000 on the back of lower throughput and grades at Los Pelambres.

Looking ahead, Antofagasta said full-year copper production had been revised downwards to 640,000-660,000 tonnes, mainly reflecting the impact of the pipeline incident and "continued uncertainty" arising from the water shortage at Los Pelambres.

Antofagasta stated cash costs before by-product credits in the quarter were $2.40 per pound, $0.06 higher than in the first quarter, while for H1 as a whole, cash costs came to $2.37 per pound - a 37% year-on-year increase year, mainly due to the temporary decrease in production and higher input prices, particularly for diesel and sulphuric acid. Net cash costs were $1.90 per pound in Q2 and $1.82 per pound for H1.

The FTSE 100-listed firm added that with increases in diesel and other input prices, it had also increased net cash cost guidance to $1.65 per pound, assuming market consensus estimates of by-product prices and the Chilean Peso exchange rate can be achieved for the rest of 2022.

Reporting by Iain Gilbert at Sharecast.com