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Antofagasta reiterates production guidance as mining operations get back on track

A third of the copper miner’s workers were either quarantining or working at home during most of the period

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Antofagasta PLC (LON:ANTO) has reported an 8.4% fall in copper production in the second quarter of the year as only two-thirds of its workforce were on site due to the coronavirus (COVID-19) pandemic.

Gold production tumbled 29.3% to 46,000 ounces compared with the first quarter, though this was mainly due to lower grades at the Centinela mine.

READ: Antofagasta changes its mind and cuts dividend payments by a total of US$160.7mln

The FTSE 100-listed group said the remaining third of its workers were either quarantining or working at home, with Chile one of the worst-hit countries by the COVID-19 pandemic.

But Antofagasta chief executive Iván Arriagada said as the company has gained experience of working safely amid the pandemic, operational activity has been expanded in areas that had been initially restricted, such as mine development and maintenance. 

“As a result, we believe we can continue to operate at current levels until the end of the year, assuming no further COVID-19 related restrictions are imposed,” he added.

Although copper production in the quarter of 177,700 tonnes was down on the preceding quarter, production for the first half as a whole was only down 4% and not far off the company’s original guidance. 

Net cash costs averaged US$1.12 per pound (lb) over the half, 6% cheaper than last year, as a result of the weaker Chilean peso, lower input costs and continued tight cost control.

Realised prices for copper in the first half were US$2.46 per lb, down 12.5% on last year, while for gold it was 26.7% higher at US$1,680. 

“As the outlook remains uncertain, despite the performance of our operations in the first half of 2020 we are maintaining our guidance for the full year at the lower end of the original 725-755,000 tonnes range, at a net cash cost of $1.20/lb,” said Arriagada.

Quick facts: Antofagasta PLC

Price: 1066.5 GBX

Market: LSE
Market Cap: £10.51 billion


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