- Q4 production uptick of 10 per cent
- Further expansion projects up for approval this quarter
Copper giant Antofagasta (ANTO) says it will hit its 2023 guidance a year late. The company knocked its production expectation for last year by around 5 per cent, but says it will produce 670,000-710,000 tonnes of the red metal in 2024 as new desalination and processing plants ramp up. There was already an uptick in the fourth quarter, to 191,500 tonnes of copper, taking the total to for the year to 660,000.
Costs for 2023 were net $1.61 (£1.21) per pound (lb), similar to 2022. The miner also expects $1.60 per lb this year, with the stronger gold price helping keep this down. The cost is presented after gold byproduct sales.
The new plants, which will slowly boost output, have involved years of heavy capital spending. This will continue for some time, after Antofagasta approved the Centinela second concentrator project last month. At $4.4bn, this is a major undertaking, but will add 144,000 tonnes a year of copper output after three years of construction.
The current year’s capital expenditure bill is $2.7bn, well ahead of analyst forecasts of under $2.2bn. Bernstein analyst Bob Brackett said this difference was likely to be timing-related, as opposed to a real increase in costs. The board has another big bill to sign off this quarter, as well. The Los Pelambres mine needs more water, and phase two of the desalination plant will take capacity to 800 litres a second.
RBC’s Tyler Broda said fourth-quarter production numbers should drive up 2023 earnings forecasts before full-year resultson 20 February. “We believe improving copper markets over the next few years and the highest production growth in our coverage will allow for Ebitda to double,” he added.
Last IC view: Hold, 1,621p, 10 Aug 2023
