Antofagasta, the Chilean copper miner, has revised its full-year copper production outlook for 2022. Despite an increase in production in the first half of the year, the company has lowered its guidance due to construction delays and water availability issues at its Los Pelambres site.
Increased Production in the First Half
In the first six months of 2022, Antofagasta produced 295,500 metric tons of copper, achieving a net cash cost of $1.75 per pound. This is an improvement compared to the production of 268,600 tons at a net cash cost of $1.82 per pound in the same period last year. The increase in production can be attributed to enhanced throughput at the Los Pelambres site.
Lowered Copper Production Guidance
However, for the full year, Antofagasta has adjusted its copper production guidance. The company now expects to produce between 640,000 and 670,000 tons, down from the previous estimate of 670,000 to 710,000 tons. This adjustment is primarily due to a delay in the completion of the desalination plant and concentrator expansion at Los Pelambres, as well as reduced water availability during the first half of the year.
Changing Cost Projections
With the revised production outlook, there are also changes to net cash costs. Antofagasta now projects net cash costs before byproduct credits to be $2.30 per pound for the full year, slightly higher than the previous expectation of $2.20 per pound. However, the company’s full-year capital expenditure guidance remains unchanged at $1.9 billion.
Long-Term Growth Ambitions
Although facing challenges in the short term, Antofagasta remains optimistic about the long-term demand for copper. Chief Executive Ivan Arriagada stated that the company sees resilience in the demand as the global decarbonization journey continues, with copper playing a crucial role in the transition. Antofagasta aims to expand its business and achieve an annual copper production of 900,000 tons.
In conclusion, Antofagasta has adjusted its copper production outlook for 2022 due to construction delays and water availability issues at its Los Pelambres site. Despite these challenges, the company remains focused on its long-term growth ambitions to meet the increasing demand for copper in the global decarbonization journey.