SANTIAGO – Chilean miner Collahuasi said on Tuesday it expected to slash production costs to under $1/lb of copper this year as it boosts output and uses efficiency measures to optimise operations.
Collahuasi, owned by Anglo American and Glencore, is a copper mine located in northern Chile and is among the world´s largest.
"We´ve decreased our costs to $1.14 (per pound), and we think that this year they will go below one dollar," said Collahuasi CEO Jorge Gomez during a talk at the CRU/CESCO World Copper Conference, in Santiago.
Global miners and investors have been particularly attuned to production costs as inflation begins to increase alongside rising commodity prices, including that of copper.
In an interview with Reuters following his talk at the conference, Gomez said increased production at the mine, following several years of technical, weather and labour-related setbacks, has helped reduce costs, together with efficiency measures.
"A couple of cents less than a dollar. That will put us in the top quarter (of costs reduction industry-wide) after previously being in the bottom quarter," he said.
Hennie Faul, CEO for copper at Anglo-American, one of the mine´s top shareholders, said in an interview with Reuters this week that productivity improvements and brightening long-term fundamentals for copper could open the door to a potential expansion at Collahuasi.
Gomez added that the mine was well-positioned "to take on new challenges" and said Collahuasi was assessing different possibilities to reduce the mine´s use of water - a critical though often scarce resource in Chile´s parched northern desert.
"Not necessarily a desalination plant, which may be the most common (solution)..." Gomez said. "In economic terms, it´s a decision that needs to be taken very seriously."
Collahuasi produced 524 000 t of copper in 2017.