Antofagasta, a Chilean mining company, has announced an increase in third-quarter production for all its metals. This boost in production can be attributed to higher output from the Los Pelambres and Centinela mines.
Copper Production
In the third quarter of 2023, Antofagasta produced 173,600 metric tons of copper, representing a 16.0% increase compared to the previous quarter (2Q 2023: 149,600 tons). This growth is primarily driven by the improved performance of both Los Pelambres and Centinela mines.
For the first nine months of 2023, copper production reached 469,100 tons, marking a 4.1% year-on-year increase (9M 2022: 450,600 tons). The surge in production is attributed to the higher copper in concentrate production at Los Pelambres and Centinela.
Gold Production
Antofagasta also experienced a significant rise in gold production during the third quarter of 2023. A total of 57,400 ounces were produced, demonstrating a 30.5% increase compared to the previous quarter (2Q 2023: 44,000 ounces). This impressive growth can be largely attributed to increased production at the Centinela mine.
Over the first nine months of the year, gold production increased by 19.0% to reach 143,600 ounces (9M 2022: 120,700 ounces).
Molybdenum Production
In terms of molybdenum production, Antofagasta reported a substantial increase in the third quarter of 2023. A total of 3,200 tons were produced, representing a 33.3% increase compared to the previous quarter (2Q 2023: 2,400 tons). Both Los Pelambres and Centinela mines contributed to this greater output.
Year to date, molybdenum production reached 8,100 tons, reflecting a 22.7% increase from the same period last year (9M 2022: 6,600 tons). This growth is attributed to higher output from both the Los Pelambres and Centinela mines.
Guidance
Antofagasta maintains its copper production guidance for 2023, which remains at 640-670,000 tons.
The company also reiterates its full-year guidance for cash costs ($2.30/lb) and net costs ($1.65/lb).
Additionally, Antofagasta expects full-year capital expenditure (capex) to be $2.0 billion (previously $1.9 billion) due to the advancement of certain development projects within the company’s portfolio.
Copper Production Projections for 2024
According to recent estimates, copper production is expected to reach a range of 670,000 to 710,000 tons in 2024. This increase in production primarily stems from the progress made in the Phase 1 Expansion at Los Pelambres.
Cash Costs Overview
In the third quarter of 2023, the cash costs before by-product credits amounted to $2.27 per pound, marking an 8.1% decrease compared to the previous quarter ($2.47 per pound in the second quarter of 2023). This decline can be attributed to higher copper production and lower input prices, particularly electricity costs.
For the first nine months of 2023, cash costs before by-product credits averaged $2.40 per pound, reflecting a year-on-year increase of 5.7%. The rise can be attributed to inflation, higher labor costs resulting from concluded labor agreements during this period, and the stronger Chilean peso. However, this increase was partially offset by lower input prices.
Net Cash Costs
In the third quarter of 2023, net cash costs amounted to $1.47 per pound, presenting a significant decrease of 25.0% compared to the second quarter of 2023. This decrease can be attributed to both lower cash costs and higher by-product credits.
For the first nine months of 2023, net cash costs averaged $1.65 per pound, aligning with the Company’s full-year guidance.
By-Product Credits
By-product credits in the third quarter of 2023 amounted to 80 cents per pound, surpassing the 51 cents per pound recorded in the second quarter of 2023. This increase reflects higher by-product output.
On a year-to-date basis, by-product credits continued to show a similar trend, increasing to 75 cents per pound in the first nine months of 2023, in contrast to the 51 cents per pound in the corresponding period last year.
