Fall in price of copper weighs on Antofagasta

CHILEAN copper miner Antofagasta reported a 7.6 per cent drop in first-half profits yesterday, as falling copper prices and higher production costs took their toll.

The FTSE 100 company said its pre-tax profits fell to $1.56bn (£985m) in the six months to 30 June, down from $1.69bn the previous year.

Copper production was up by 16.5 per cent thanks to increased production at Antofagasta’s Esperanza mine, which began operations at the start of last year. The miner added that it was on track to hit a full-year copper target of 700,000 tonnes.

Gold production at Esperanza almost doubled to 136,100 ounces over the first half.

However, rising costs at the flagship mine hit profits. Antofagasta said yesterday it would spend an additional $200m to $250m over the next two years to improve processes and bring Esperanza to full capacity.

Copper prices per pound at the London Metal Exchange have fallen by almost 14 per cent year-on-year, according to the miner, which hurt profit.

Antofagasta said yesterday that the copper industry fundamentals remained strong over the medium term, while demand for copper was “relatively robust”.

It said yesterday that its focus for future growth will be on the Centinela Mining District in Chile.

As exploration costs rose, the dividend was lifted by only 6.3 per cent to 8.5 cents a share.