Copper miner Antofagasta has said cash costs for the year will be lower than expected, but shares in the firm fell more than four per cent in early trading on a weaker production forecast.
In a third quarter production report, Antofagasta said its copper output rose 3.3 per cent compared with the previous quarter, reaching 180,200 tonnes, due to higher production at the huge Los Pelambres mine. Net cash costs rose 9.3 per cent to $1.18 per pound in the quarter.
Copper production rose to 526,500 tonnes in the first nine months of the year, 4.5 per cent higher than in the same period last year, on rising production at the Centinela and Antucoya mines.
Despite the quarterly increase in net cash costs, Antofagasta said 2017 costs will be below the $1.30 per pound it has forecast previously, but it did not specify a new figure.
Copper prices climbed around 10 per cent in the third quarter and reached a three-year high last week thanks to a positive economic outlook for top buyer China.
For 2017, Antofagasta maintained output expectations of 685,000 to 720,000 tonnes, and it is targeting 705,000 to 740,000 tonnes in 2018.
Shares in the FTSE 100 firm fell 4.02 per cent to 989.5p in morning trading.
Chief executive Ivan Arriagada said: "Unit costs have kept flat, despite increased cost pressures, with higher production at Centinela and Antucoya, and our continued focus on improving efficiencies.
"In 2018 we plan to increase production to 705-740,000 tonnes of copper as Encuentro Oxides ramps-up to full production."
Analysts at Investec said the 2018 guidance was "soft".
This is less than a three per cent production increase (using mid-ranges), which may disappoint some of the market. Bloomberg Consensus has an average six per cent lift in sales from FY17 to FY18, but many of the contributors illustrate much more substantial rises (assumed copper prices will of course play a part).