TIDMANTO
RNS Number : 8878F
Antofagasta PLC
21 July 2021
NEWS RELEASE, 21 JULY 2021
Q2 2021 PRODUCTION REPORT
PRODUCTION AND COSTS IN LINE WITH GUIDANCE
Antofagasta plc CEO, Iván Arriagada said: "The cost and
production performance over the first half of this year was in line
with guidance and supports our strong track record of resilience
and operational excellence. We produced 361,500 tonnes of copper at
a net cash cost of $1.14/lb over the period and retain guidance for
the full year at 730-760,000 tonnes of copper at a net cash cost of
$1.25/lb and capital expenditure of $1.6 billion.
"We continue to proactively manage the risks of COVID-19 on the
Company's operations and projects and expect that as the successful
national vaccination rollout continues in Chile, the restrictions
that have been imposed will continue to be lifted, leading to a
loosening of region-specific restrictions on movement.
"The copper, gold and molybdenum markets have been strong
throughout the first half of the year, with copper trading
two-thirds higher than last year at well over $4.00/lb. As
vaccination levels increase around the world, the global economy is
expected to continue to recover strongly from the pandemic
providing further support for the copper market."
HIGHLIGHTS
PRODUCTION
-- Group copper production in Q2 2021 was 178,400 tonnes, a
decrease of 2.5% compared to the previous quarter, mainly because
of lower recoveries at Centinela Cathodes and expected lower grades
at Zaldívar
-- Group copper production in the first six months of the year
was 361,500 tonnes, in line with expectations and 2.8% lower than
in the same period last year mainly because of lower grades
-- Gold production for the quarter increased by 3.9% to 61,400
ounces compared with Q1 mainly due to higher grades at Centinela,
and for the first six months increased by 8.5% to 120,500
ounces
-- Molybdenum production was 2,800 tonnes, some 200 tonnes lower
than previous quarter. For the year to date, production was 5,800
tonnes, 5.5% higher than in the same period last year
CASH COSTS
-- Cash costs before by-product credits in the quarter were
$1.77/lb, 9c/lb higher than in the first quarter and for the first
half of the year were $1.73/lb, 14.6% higher than in the same
period last year primarily because of the stronger Chilean peso
(11%), higher energy and diesel prices, and the lower copper
production
-- Net cash costs were $1.13/lb in Q2 2021 and $1.14/lb for the
first half of the year, a 2.6% decrease compared with the previous
quarter but 1.8% higher than in the first half of 2020. This was
primarily due to higher cash costs before by-product credits,
offset by higher by-product credits on higher realised prices
-- Centinela's net cash costs were $1.08/lb, its lowest ever
over a six-month period, benefitting from a consistent high level
of throughput and strong by-product credits
2021 GUIDANCE
-- Full year guidance is unchanged at 730-760,000 tonnes of
copper at a net cash cost of $1.25/lb. Los Pelambres and Centinela
have performed strongly in the first half of the year, and
Zaldívar's and Antucoya's cash costs are expected to continue at a
similar level as in H1. However, so far this year precipitation at
Los Pelambres has been significantly less than in 2019, which was
itself the driest year of the current 12-year drought. Strict water
management protocols are in place and various options are being
evaluated to mitigate the risk of the impact of the reduced
rainfall, in case this situation continues. Guidance assumes
minimum required precipitation levels resume over the balance of
the year and is therefore subject to water availability.
-- Capital expenditure for the year is currently expected to be
in line with original guidance at $1.6 billion, although as
COVID-19 infection rates continue to fall, opportunities to
accelerate the execution of selected capital expenditure will
continue to be evaluated
SUSTAINABILITY
-- During the quarter the Company announced new emissions
targets to reduce its direct and indirect GHG emissions by 30%, or
by 730,000 tonnes of CO2e by 2025 and to achieve carbon neutrality
by 2050
-- The Company became the first mining company to join the
Chilean Hydrogen Association, which promotes the development of
green hydrogen and aims to accelerate the transition of its mining
fleet from diesel to hydrogen
-- The Company joined a group of leading mining companies in the
Charge On Innovation Challenge , to develop solutions for
large-scale haul truck electrification systems to reduce
consumption of diesel and cut emissions
-- During H1, the Company extended by an equal amount its
original $6 million COVID-19 fund which provides health, economic
and general support to local communities
OTHER
-- As at the end of H1 the Los Pelambres Expansion project was
52.0% complete and is expected to be completed in H2 2022 in line
with guidance. The desalination plant and related marine works have
progressed on schedule and have been minimally impacted by COVID-19
given the dispersed nature of the site and small construction teams
involved
-- At the end of June, adverse weather conditions at the ports
temporarily delayed some 15,000 tonnes of shipments over the period
end, mostly at Centinela. The delayed shipments were shipped in
early July and will therefore be recorded as sales in Q3
-- Inflationary pressure on costs has to date been moderate and
mainly arising from higher commodity prices, such as for diesel,
acid and energy, and the depreciation of the Chilean peso, but with
no evidence of wage inflation or other permanent price effects on
local goods and services
-- Having moved from the lower house of Congress to the Senate,
the proposed new mining royalty continues to be debated in the
legislature. The Senate is not restricted to the specific terms of
the proposal presented by the lower house and is currently
receiving evidence from a much broader base of interested parties
including academics and mining industry representatives
-- The Constitutional Assembly, which was elected to develop a
new constitution within a twelve-month period, met for the first
time in July and has started work. At the end of this period, a
national referendum will be held to approve or reject the proposed
constitution
GROUP PRODUCTION AND CASH COSTS Year to Date Q2 Q1
---------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------ ------ ------ -------
Copper production kt 361.5 371.7 (2.8) 178.4 183.0 (2.5)
Copper sales kt 346.1 374.2 (7.5) 163.4 182.8 (10.6)
Gold production koz 120.5 111.1 8.5 61.4 59.1 3.9
Molybdenum production kt 5.8 5.5 5.5 2.8 3.0 (6.7)
------------------------------ ------ ------ ------ ------ ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.73 1.51 14.6 1.77 1.68 5.3
Net cash costs (1) $/lb 1.14 1.12 1.8 1.13 1.16 (2.6)
------------------------------ ------ ------ ------ ------ ------ ------ -------
(1) Cash cost is a non-GAAP measure used by the mining industry
to express the cost of production in US dollars per pound of copper
produced.
Investors - Media - London
London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Rosario Orchard rorchard@antofagasta.co.uk
Telephone +44 20 7808 0988 Media - Santiago
Pablo Orozco porozco@aminerals.cl
Carolina Pica cpica@aminerals.cl
Telephone +56 2 2798 7000
Register on our website to receive our email alerts
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MINING OPERATIONS
Los Pelambres
Los Pelambres produced 84,400 tonnes of copper in Q2 2021, 0.6%
lower than in the previous quarter mainly driven by expected lower
grades, partially offset by higher recoveries.
In the first six months of 2021, copper production decreased by
7.6% to 169,300 tonnes compared with the same period last year.
This decrease was primarily due to the expected lower copper grade,
partially offset by higher throughput.
Molybdenum production was 2,400 tonnes in Q2 2021, a 7.7%
decrease compared to the previous quarter as a result of lower
recoveries. Production for the first six months of the year was
5,100 tonnes, 100 tonnes lower than the same period last year.
Cash costs before by-product credits in Q2 2021 were $1.56/lb,
6.8% higher than Q1 and for the first six months of 2021 were
$1.51/lb, 25.8% higher than the same period last year. This was due
to the decrease in production, the stronger Chilean peso, higher
input prices and the payment of a one-off signing bonus in Q1
following the successful completion of labour negotiations.
Net cash costs in Q2 2021 decreased by 3c/lb compared to Q1 2021
to $0.81/lb reflecting higher cash costs before by-product credits
fully offset by by-product credits increasing from 62c/lb to 75c/lb
on higher realised prices. Compared to the previous year net cash
costs increased by 3.8% to $0.83/lb.
As previously announced, the major maintenance originally
scheduled for Q2 has been postponed and is now expected to take
place in Q4.
As at the end of H1 the Los Pelambres Expansion project was
52.0% complete and is expected to be completed in H2 2022 in line
with guidance. The desalination plant and related marine works are
on schedule and have been minimally impacted by COVID-19 given the
dispersed nature of the site and small construction teams
involved.
At the concentrator expansion site, the bulk earthworks and most
of the foundations have been completed, and the key milling and
flotation equipment is being installed. Managing health risks and
higher absenteeism during the recent peak of infections in the
neighbouring communities has required adjustments to manpower
numbers and shift patterns at the concentrator plant expansion
site. However, these are gradually returning to normal with more
than 70% of the project workforce fully vaccinated and the number
of cases in local communities decreasing. While this has impacted
project activities, project completion is still expected to be in
H2 2022.
LOS PELAMBRES Year to Date Q2 Q1
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 163.9 162.2 1.0 163.3 164.5 (0.7)
Copper grade % 0.66 0.71 (7.0) 0.65 0.67 (3.0)
Copper recovery % 89.7 90.0 (0.3) 90.2 89.1 1.2
Copper production kt 169.3 183.2 (7.6) 84.4 84.9 (0.6)
Copper sales kt 165.5 186.8 (11.4) 84.9 80.7 5.2
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.021 0.019 10.5 0.021 0.021 0.0
Molybdenum recovery % 84.6 85.5 (1.1) 83.9 85.3 (1.6)
Molybdenum production kt 5.1 5.2 (1.9) 2.4 2.6 (7.7)
Molybdenum sales kt 4.9 4.6 6.5 2.3 2.6 (11.5)
Gold grade g/t 0.048 0.047 2.1 0.048 0.048 0.0
Gold recovery % 66.5 72.0 (7.6) 64.9 68.1 (4.7)
Gold production koz 28.0 29.1 (3.8) 13.8 14.3 (3.5)
Gold sales koz 25.8 27.7 (6.9) 12.9 12.9 0.0
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.51 1.20 25.8 1.56 1.46 6.8
Net cash costs (1) $/lb 0.83 0.80 3.8 0.81 0.84 (3.6)
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.17/lb in Q2 2021, $0.14/lb in
Q1 2021, $0.15/lb YTD 2021 and $0.19/lb YTD 2020
Centinela
Total copper production in H1 2021 was 132,100 tonnes, 8.6%
higher than in H1 2020 due to higher ore grades and throughput at
Centinela Concentrates. Total copper production in Q2 2021 was
65,200 tonnes, 2.4% lower than in the previous quarter mainly as a
result of lower recoveries at Centinela Cathodes.
Production of copper in concentrate was 45,100 tonnes in Q2 2021
in line with the previous quarter and 90,400 tonnes for the half
year, 20.9% higher than in the same period last year, mainly
reflecting higher ore grades and throughput, although throughput in
Q2 was reduced slightly due to maintenance work on the mills.
Copper cathode production during the quarter was 20,200 tonnes,
6.0% lower than Q1 2021, and for the first six months it was 41,700
tonnes, 10.9% lower than in the same period last year primarily due
to expected lower grades and recoveries, despite higher
throughput.
Gold production in Q2 was 47,600 ounces, 6.0% higher than the
previous quarter and in H1 it was 92,500 ounces, 12.8% higher than
H1 last year, primarily due to higher throughput and grades.
Molybdenum production in H1 2021 increased to 700 tonnes from
300 tonnes in H1 2020, due to higher grades.
Cash costs before by-product credits in Q2 were $1.82/lb, 2.2%
higher than in the previous quarter on lower copper production.
Cash costs before by-product credits for the first six months of
2021 were $1.80/lb, 2.2% lower than the same period in 2020 due to
higher copper production, partially offset by the stronger Chilean
peso, higher input prices and higher maintenance costs as a result
of bringing forward some scheduled work.
By-product credits increased from $0.66/lb in Q1 to $0.78/lb in
Q2 due to higher realised prices and gold production. For the first
six months of 2021, by-product credits were $0.72/lb, 14c/lb higher
than in the same period last year due to higher production and
improved realised prices.
Net cash costs in Q2 2021 were $1.04/lb, 7.1% lower than the
previous quarter, and during the first six months of the year net
cash costs were $1.08/lb, the lowest cost ever for Centinela in a
six-month period and 14.3% lower than in H1 2020 due to lower cash
costs before by-product credits and higher by-products credits.
CENTINELA Year to Date Q2 Q1
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 104.7 93.7 11.7 102.9 106.4 (3.3)
Copper grade % 0.59 0.53 11.3 0.59 0.60 (1.7)
Copper recovery % 84.7 86.7 (2.3) 85.2 84.2 1.2
Copper production kt 90.4 74.8 20.9 45.1 45.3 (0.4)
Copper sales kt 80.8 71.9 12.4 35.7 45.1 (20.8)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.009 0.008 12.5 0.009 0.010 (10.0)
Molybdenum recovery % 46.2 22.7 103.5 53.8 39.5 36.2
Molybdenum production kt 0.7 0.3 133.3 0.3 0.4 (25.0)
Molybdenum sales kt 0.8 0.1 700.0 0.3 0.4 (25.0)
Gold grade g/t 0.22 0.21 4.8 0.23 0.22 3.2
Gold recovery % 72.4 73.0 (0.8) 72.8 71.9 1.3
Gold production koz 92.5 82.0 12.8 47.6 44.9 6.0
Gold sales koz 77.9 80.7 (3.5) 35.4 42.6 (16.9)
------ ------ ------- ------ ------ -------
CATHODES
Daily ore throughput kt 56.3 55.8 0.9 55.7 56.9 (2.1)
Copper grade % 0.60 0.64 (6.3) 0.62 0.59 5.1
Copper recovery % 65.1 69.3 (6.1) 63.7 66.4 (4.1)
Copper production - heap
leach kt 39.8 44.4 (10.4) 19.3 20.4 (5.4)
Copper production - total
(1) kt 41.7 46.8 (10.9) 20.2 21.5 (6.0)
Copper sales kt 38.6 47.6 (18.9) 16.8 21.8 (22.9)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 132.1 121.6 8.6 65.2 66.8 (2.4)
Cash costs before by-product
credits (2) $/lb 1.80 1.84 (2.2) 1.82 1.78 2.2
Net cash costs (2) $/lb 1.08 1.26 (14.3) 1.04 1.12 (7.1)
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.11/lb in Q2 2021, $0.12/lb in
Q1 2021, $0.12/lb YTD 2021 and $0.13/lb YTD 2020
Antucoya
Antucoya produced 19,200 tonnes of copper in Q2 2021, 5.0% lower
than in the previous quarter. Production in the first six months of
2021 was 39,500 tonnes, 2.2% lower than the same period last year
due to expected lower grades and consequentially lower recoveries,
partly offset by a 7.7% increase in throughput.
During the quarter, cash costs were $2.12/lb compared to
$1.96/lb in Q1. For the first six months, cash costs were 17.9%
higher than in H1 2020 at $2.04/lb due to lower production, the
unfavourable local exchange rate and higher expenditure on
maintenance services.
ANTUCOYA Year to Date Q2 Q1
--------------------- ----- -----
2021 2020 % 2021 2021 %
---------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 84.0 78.0 7.7 87.3 80.6 8.3
Copper grade % 0.35 0.39 (10.3) 0.34 0.35 (2.9)
Copper recovery % 68.4 73.5 (6.9) 67.9 69.1 (1.7)
Copper production kt 39.5 40.4 (2.2) 19.2 20.2 (5.0)
Copper sales kt 40.1 40.5 (1.0) 17.2 22.9 (24.9)
---------------------- ------ ----- ----- ------- ----- ----- -------
Cash costs $/lb 2.04 1.73 17.9 2.12 1.96 8.2
---------------------- ------ ----- ----- ------- ----- ----- -------
Zaldívar
Copper production at Zaldívar in Q2 2021 was 9,600 tonnes, 13.5%
lower than previous quarter due to lower grades and throughput,
which was impacted by planned major maintenance in the quarter.
Production for the year to date was 20,600 tonnes, 22.3% lower
compared with the same period last year due to lower copper grades
and throughput. In particular, the proportion of sulphide ore being
processed this year is increasing and this has reduced heap
recoveries. However, completion of the Chloride Leach project in H1
2022 is designed to improve future recoveries from sulphide
ore.
Cash costs during Q2 were $2.65/lb, 15.2% higher than in Q1
2021, and cash costs for the first six months of 2021 were $2.46/lb
compared with $1.72/lb in the same period in 2020, mainly due to
lower grades, higher maintenance costs and the stronger Chilean
peso. This cost level seen in H1 is expected to continue in H2.
ZALDÍVAR Year to Date Q2 Q1
--------------------- ----- -----
2021 2020 % 2021 2021 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 40.3 44.7 (9.8) 38.6 42.2 (8.5)
Copper grade % 0.78 0.97 (19.6) 0.66 0.88 (25.0)
Copper recovery (1) % 50.3 59.3 (15.2) 50.3 48.8 3.1
Copper production - heap
leach (2) kt 15.2 20.5 (25.9) 6.2 9.0 (31.1)
Copper production - total
(2,3) kt 20.6 26.5 (22.3) 9.6 11.1 (13.5)
Copper sales (2) kt 21.1 27.4 (23.0) 8.7 12.4 (29.8)
Cash costs $/lb 2.46 1.72 43.0 2.65 2.30 15.2
----- ----- ----- -----
(1) Restated from average over full leach cycle to 12-month
rolling recoveries
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q2 2021 were 1.7 million tonnes, 9.2%
higher than in the previous quarter, as a new transport contract
came into effect during the period.
For the first six months of the year, transport volumes
decreased by 0.8% mainly due to customers' lower copper production
and sulphuric acid consumption, and the impact of sea swells
affecting port access at the beginning of the year, partly offset
by the new transport contract in Q2.
TRANSPORT Year to Date Q2 Q1
----------------------- ------ ------
2021 2020 % 2021 2021 %
--------------------------- ---- ------ ------ ------- ------ ------ -----
Rail kt 2,514 2,407 4.4 1,297 1,216 6.7
Road kt 678 811 (16.4) 369 309 19.4
Total tonnage transported kt 3,192 3,218 (0.8) 1,666 1,526 9.2
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q2 Q1
----------------------- ------ ------
2021 2020 % 2021 2021 %
------ ------ ------- ------ ------
Copper
Market price $/lb 4.13 2.49 65.9 4.40 3.85 14.3
Realised price $/lb 4.42 2.46 79.6 4.59 4.26 7.7
---------------- ------ ------ ------ ------- ------ ------ ------
Gold
Market price $/oz 1,808 1,647 9.8 1,815 1,800 0.8
Realised price $/oz 1,776 1,680 5.7 1,855 1,708 8.6
---------------- ------ ------ ------ ------- ------ ------ ------
Molybdenum
Market price $/lb 12.7 9.0 41.1 14.2 11.3 25.7
Realised price $/lb 16.1 8.7 85.1 19.2 13.3 44.4
---------------- ------ ------ ------ ------- ------ ------ ------
Exchange rates
per
Chilean peso $ 720 813 (11.4) 716 724 (1.1)
---------------- ------ ------ ------ ------- ------ ------ ------
Spot commodity prices for copper, gold and molybdenum as at 30
June 2021 were $4.26/lb, $1,760/oz and $19.0/lb respectively,
compared with $4.01/lb, $1,688/oz and $11.1/lb as at 31 March 2021
and $2.74/lb, $1,769/oz and $7.4/lb as at 30 June 2020.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were positive $113.1 million, negative
$0.9 million and positive $30.8 million respectively.
The provisional pricing adjustments for copper, gold and
molybdenum for the year to date were positive $282.1 million,
negative $8.0 million and positive $43.7 million respectively.
Share of profits from associates and JVs
Following the disposal of Hornitos last year, the share of
profit from associates and JVs for the half year is approximately
$20 million.
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