Antofagasta, a Chilean copper miner, has announced that its copper production increased in the third quarter of the year, supporting its full-year forecast. The company reported a production of 173,600 metric tons in the quarter, a 16% rise compared to the previous quarter. The growth was primarily driven by a 17% increase in output at the Los Pelambres mine and a 24% surge in production at the Centinela mine.
The expansion at Los Pelambres played a significant role in the rise, aided by improved water availability from a newly constructed desalination plant. This has led to a reduction in net cash costs, which improved to $1.47 per pound from $1.96 per pound in the second quarter. The increase in production and higher by-product credits contributed to this positive development. By-product credits include revenues earned from all metals other than the primary metal produced at each unit.
While demand for copper has weakened in some regions due to rising interest rates impacting construction activity, the core market in China has remained resilient. Analysts predict that global copper prices will rise in the first quarter of next year. Antofagasta remains optimistic about its contribution to the global decarbonisation journey, as highlighted by CEO Ivan Arriagada.
In addition to copper, Antofagasta also experienced growth in gold and molybdenum production. Gold production increased by 31% to 57,400 ounces, while molybdenum production rose by 33% to 3,200 tons.
The company maintains its full-year copper production forecast of 640,000-670,000 tons and expects its cash cost and capital expenditure estimates for the year to remain consistent. Antofagasta believes in the strong long-term fundamentals for copper, with increasing demand projected for the coming years amid challenging incremental supply.