22nd Apr 2020 08:16
(Alliance News) - Chilean miner Antofagasta PLC on Wednesday said production increased in its first-quarter despite operating with just roughly two-thirds of its workforce due to Covid-19 related preventative measures.
The FTSE 100 firm however cut its annual capital expenditure budget due to the health crisis.
Copper production in the period to March 31 was 2.9% higher year-on-year and climbed 4.6% quarter-on-quarter to 194,000 tonnes.
Copper sales climbed 9.2% annually to 195,300 tonnes, a 0.8% rise from the fourth quarter of 2019.
Gold production was 4.7% higher year-on-year at 65,100 ounces, which Antofagasta attributed to higher grades at the Centinela mine in Chile. Quarter-on-quarter, gold output jumped 17%.
Chief Executive Ivan Arriagada said: "Although we are currently operating with about two-thirds of our workforce on-site in line with our preventative health measures, this has so far had a limited impact on production."
Antofagasta's production of molybdenum, an element often used as an alloying agent for steel, was down 31% annually at 2,400 tonnes.
"We expect that for the foreseeable future we will need to maintain and continue to evolve the precautionary health measures we have adopted, including social distancing, revised personal protective equipment, increased teleworking and other health related changes," Arriagada said.
"Because of these and other actions we have taken we now expect copper production to be towards the lower end of the original 725,000 to 755,000 tonnes guidance range, assuming our mining operations are not required to shut down temporarily."
Antofagasta planned capital expenditure budget for 2020 is now expected to be less than USD1.3 billion, which would be at the very least a 13% cut from the initial forecast of USD1.5 billion.
This is due to the miner suspended expansion work at the Los Pelambres project in Chile, deferring other capital expenditure and a weaker Chilean peso.
"We have a solid balance sheet with USD2.5 billion of cash which put us in a strong position to confront this unprecedented situation of operational uncertainty and lower copper price environment," Antofagasta's CEO added.
Shares in the company were 1.4% higher at 741.00 pence each in early trading in London on Wednesday morning.
By Eric Cunha; [email protected]
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