Antofagasta (ANTO) has limited its production decline so far this year even with Covid-19 shutdowns across Chile. The miner produced 371,700 tonnes (t) of copper in the first half, a 4 per cent drop year-on-year.
Gold production fell more significantly because of a drop in grade at the Centinela mine. The company has been running its mines with two-thirds of the usual workforce as a response to Covid-19, but has maintained guidance for 2020 at “the lower end” of 725,000-755,000t. Costs related to the pandemic came to $38m so far this year, with $21m of that related to the paused expansion projects.
But gold and copper’s price rises in recent months mean the June quarter should still be a productive one for Antofagasta. The average sales prices in the quarter were $2.94 (£2.34) per pound (lb) for copper and $1,680 per ounce (oz) for gold, a 46 per cent and 11 per cent quarter-on-quarter increase respectively.
Alongside the production decreases, Antofagasta’s costs went down in the first half thanks to a weaker Chilean peso. The company calculates its net cost by deducting gold and molybdenum earnings - ‘byproduct credits’ - from its copper cash cost, although these came down in half because of the production falls. The net cost for the first half was $1.12/lb, and the guidance for 2020 is $1.20/lb.
Unions in Chile have raised concerns over the levels of coronavirus infection within the major copper mines in the north of the country, where three of Antofagasta’s operations are. Antofagasta did not report how many workers had been infected.
