By Alex MacDonald
LONDON--Antofagasta PLC (ANTO.LN) reported Wednesday weaker than
expected second-quarter output and cut its full-year copper
production forecast due to a delay in the startup of its $1.9
billion Antucoya project.
The FTSE 100 miner reported a 7.2% rise in copper output to
157,000 metric tons in the second quarter compared with the first
quarter when protests impeded copper output from its flagship Los
Pelambres mine and subsequent heavy rains affected output from its
Centinela mine.
"Whilst we have seen a positive recovery from these disruptions,
overall performance during the first half of the year has not been
as good as originally expected," said Chief Executive Diego
Hernandez.
First half copper production fell 12.9% on the year to 303,400
tons while gold production fell 9.1% to 112,500 troy ounces, mainly
due to forecast lower grades at Los Pelambres. Only Molybdenum
output increased, rising 42% on year to 4,700 tons due to higher
grades mined.
The company warned that the start of production from its
Antucoya project in north Chile has been delayed by about three
months until the end of the third quarter due to issues with the
commissioning of the crusher circuit.
As a result, the group reduced its full-year copper production
forecast to 665,000 tons from 695,000 tons, which in turn had
already been cut from an original guidance of 710,000 tons due to
the protests and heavy rainfall.
The miner also raised this year's net cash cost guidance to
$1.47 a pound from $1.40/lb after taking into account lower gold
and copper output as well as lower by-product prices for molybdenum
and gold.
Net cash costs for the first half of the year were $1.53/lb,
4.8% higher than the same period last year largely due to lower
gold production and lower realized molybdenum prices at Los
Pelambres.
At 1337 GMT, Antofagasta's shares were down 2.2% at 573 pence,
while the FTSE 350 mining index was broadly flat.
Citigroup said in a note that Antofagasta second-quarter
production was 8% lower than Citi's estimate while second-quarter
gross cash cost of $1.93/lb was 10% higher than Citi's
forecast.
"We expect high-single-digit to low-teens percentage downgrades
to 2015 consensus EPS" on the back of the production report, the
bank noted.
Write to Alex MacDonald at alex.macdonald@wsj.com
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