Antofagasta PLC (LON:ANTO) said its costs should be lower than expected for the full year but copper production is still likely to be at the bottom end of forecasts as maintenance work and coronavirus (COVID-19) social distancing restrictions hit output in the third quarter.
The Chilean mining giant said net cash costs are on course to be around US$1.2/lb unless exchange rates move materially before the year-end.
Costs were US$1.19/lb in the third quarter and $1.14/lb for the year to date, a slight increase compared with the previous quarter but 2.6% lower than the same period last year, primarily due to lower cash costs before by-product credits, offset by lower by-product credits.
Restrictions imposed by the Chilean government are being eased as infection rates remain stable but COVID-19 protocols are being maintained at the FTSE 100 company's operations, with approximately two-thirds of the workforce in place, and will continue for the foreseeable future.
On top of that, major maintenance work at Los Pelambres during the period and expected lower grades at its Antucoya mine led to a 4.6% quarter-on-quarter reduction in copper production in the third quarter to 169,600 tonnes.
Full-year guidance remains for production to be at the lower end of the original 725-755,000 tonnes range, with management guiding to 2021 production of 730-760,000 tonnes of copper, assuming that COVID-19 health protocols remain in place for the whole year.