Plunging copper price takes shine off Antofagasta FY results

Revenue was 34% lower at $3.4bn, with realised copper prices falling almost 24% during the period and sales volumes down by 9.5%.

Net earnings from continuing operations fell to $5.5m from $422.4m after lower prices and, lower taxes and minority interests. Including the profit from the water division net earnings were $608.2m.

Cash flow from operations decreased by 65.8% to $858.3m, compared with $2.5bn in 2014.

Capital expenditure fell $591.8m for the year to $1.04bn, which was $250m less than originally planned driven by savings identified to protect cash flow. Antofagasta said it had targeted a further $160m of savings in 2016, equivalent to 8% of 2015's net cash costs.

"In 2016 the group expects to produce 710-740,000 tonnes of copper, 245-275,000 ounces of gold and 8-9,000 tonnes of molybdenum, as Antucoya ramps up to full production and Zaldívar contributes its first full year of production," the company said.

"If the top end of our copper target is achieved the Group will have its highest year of production ever and, in conjunction with the savings and productivity programmes, will see cash costs before by-products fall to 2012 levels of $1.65/lb, and net cash costs to $1.35/lb."

"World markets at the beginning of 2016 have been dominated by uncertainty and negative sentiment even though the fundamentals are little changed."

"This uncertainty has not been favourable for the mining industry and the copper price dropped below $2.00/lb in January. However, if the fundamentals prevail the copper price should stabilise during a period of small supply surpluses before recovering in late 2017, early 2018."