Mining giant Antofagasta today said its production and costs were in line with expectations in the first quarter but warned of the impact of a fresh lockdown in its home country.
The Chile-based company said copper production was on track at 183,000 tonnes, 5.7 per cent lower than last year and five per cent lower than the fourth quarter, mainly due to reduced grades at its Los Pelambres mine.
Gold production slipped to 59,100 ounces, while Molybdenum production in the quarter was 3,000 tonnes, up 600 tonnes on the same period last year but lower than the fourth quarter.
Net cash costs were $1.16 per pound, compared to $1.10 per pound in the first quarter 2020. This was caused by lower production, the stronger Chilean peso and the payment of a one-off signing bonus to workers after the company avoided a strike earlier this year.
Antofagasta warned that a fresh wave of Covid-19 infections in Chile and a new national lockdown meant planned maintenance work at Los Pelambres would be pushed back to later this year.
It also said it was monitoring water availability as central Chile moved into its twelfth year of drought.
Despite this, Antofagasta left its guidance unchanged at between 730,000 and 760,000 tonnes of copper at a net cash cost of $1.25 per pound and capital expenditure of $1.6bn.
“The copper market continues to perform strongly, and we expect this to continue as structural supply and demand dynamics support a tight physical market. In the meantime, we maintain our focus on cost control and disciplined capital allocation,” said chief executive Ivan Arriagada.
“Production, cost and capital expenditure guidance for the full year is unchanged, assuming no additional nationwide restrictions are imposed due the pandemic.”