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Antofagasta production meets expectations despite new lockdown in Chile

Antofagasta copper production for Q1 at 183,000 tonnes

Antofagasta (LON:ANTO) confirmed on Wednesday that its production and costs were aligned with its expectations in Q1 although it remains wary of the consequences of another lockdown in Chile.

The major mining company announced its copper production was on schedule at 183,000 tonnes, 5.7% lower than the year before, and 5% down on Q4. The results were largely down to reduced grades at its Los Pelambres mine.

Production of gold is down to 59,100 ounces, while production of Molybdenum, a silvery-white ductile metal, was up by 600 tonnes from last year to 3,000 tonnes.

Net cash costs came in at $1.16 per pound, compared to $1.10 per pound in Q1 of 2020. This happened as a result of lower levels of production, a strengthening in the Chilean peso and a one-time bonus payment to employees as the company avoided a strike earlier this year.

The FTSE 100 company shared concerns that a new wave of coronavirus infections, and a subsequent national lockdown, means that scheduled maintenance works at Los Pelambres would be rescheduled to later this year.

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Nonetheless, Antofagasta did not change its guidance which is between 730,000 and 760,000 tonnes of copper, at a net cash cost of $1.25 per pound and capital expenditure of $1.6bn.

Antofagasta chief executive Iván Arriagada, made further comment on the second wave of Covid-19 in the South American country:

“In March, Chile entered a second wave of COVID-19 infections as the number of cases in Chile accelerated, reaching record daily cases since the outbreak of the pandemic. As a result, countrywide lockdowns have been reinstated with the availability of critical hospital infrastructure under significant pressure,” Arriagada.

“In addition to the health measures we introduced last year we have further reduced our on-site workforce and these actions have allowed us to continue to operate our mines and projects under these challenging conditions. Additional testing has been introduced throughout the Group while the full benefit of the country’s successful vaccination programme is expected to be realised later in the year. We also remain committed to supporting our local communities and suppliers, and contributing to the social and economic recovery of Chile.”

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