Chilean state-owned copper miner Codelco has cut its copper output forecast for this year, as operational delays and mining accidents continue to plague the company.
In its results briefing posted on Friday, Codelco made a downward adjustment to its annual copper production forecast to between 1.31 million and 1.35 million tonnes. This is down from the 1.35 million to 1.45 million tonnes previously forecast, as production fell to its lowest level in a quarter-century.
The downturn follows a recent rock explosion at Codelco's largest mine, El Teniente. This impacted facilities at the site, particularly the development and construction sectors of the Andes Norte Project, and will impact output for the rest of the year.
According to the company, extraction alternatives that might mitigate the effect on mineral supply “are being analysed”. It added that delays carried over from the last quarter also continue to impact production.
The company posted a contribution of $770m (645.73bn pesos) to the state Treasury, 6% more than that committed to the Ministry of Finance. It also reported a pre-tax profit of $329m and an EBITDA [earnings before interest, taxes, depreciation, and amortisation] of $1.77bn for the first half of this year. Average copper sales prices fell by 3% and sales volumes shrank by 11.3%, while direct production costs rose by 41.3% to around $2.12 per pound, almost double the $1.506 seen last year.
Between January and June, production ended on 633,000 tonnes of copper, a drop of 14% compared with the same period last year. Combined with affiliate projects El Abra and Anglo American Sur, total production reached 684,000 tonnes.
The company’s chief executive, Andre Sougarret, recently decided to step down by the end of August. Codelco has not yet named a successor.
Chile is the world’s largest copper producer and second-largest lithium producer. In May, it set up two new subsidiaries for its lithium business following the Chilean Government’s National Lithium Strategy plan, which aims to increase state control of lithium extraction and production.
Last month, Codelco closed its troubled Ventanas copper smelter after almost six decades of operation following a series of environmental incidents.
