Chile-focused copper miner Antofagasta posted a 22.6% jump in first-quarter copper production and maintained its full-year output outlook, despite the possibility that China may ease stimulus measures which could hurt prices.
Antofagasta said on Wednesday production in the quarter was bolstered by better quality ore and higher output, mainly at its Centinela mine, and kept its annual output forecast of 750 000 t to 790 000 t unchanged.
That was encouraging news for investors in the red metal as concerns rose that China, the world's biggest user of copper, may tone down stimulus measures after the economy showed signs of recovery.
The FTSE 100 company, majority-owned by Chile's Luksic family, said production in the first quarter of 2019 rose to 188 600 t from 153 800 t a year earlier. The number was slightly below Jefferies estimate of 197 900 t.
Total copper production at Centinela was 68,800 tonnes, 45.5% higher than 2018. Antofagasta said net cash costs fell to $1.24/lb of copper in the quarter.
Centinela mines sulphide and oxide deposits 1 350 km north of Santiago in the Antofagasta Region, one of Chile's most important mining areas.
"We are on-track for another record-setting year with full year production expected to increase by up to 9%," CEO Iván Arriagada said in a statement.
Antofagasta, however, also said scheduled maintenance at its largest mine Los Pelambres - a sulphide deposit in Chile's Coquimbo region - and Centinela, led to total production being 14.3% lower than the previous quarter.
CHILEAN PURE PLAY
Bernstein analyst Paul Gait said the miner was currently tracking towards the bottom end of its forecast range, but said he expected an improvement towards the middle and end of 2019.
"What we've got in Antofagasta is Chilean pure play which benefits from very low geopolitical risks," Gait told Reuters.
Chile's Cochilco state copper commission last week said that production this year in Chile, the top producer of copper, would increase 2.2% to 5.96-million tonnes.
Antofagasta traces its history back to 1888, as a company listed on the London market to raise money and build a railway from Antofagasta, a port on the Pacific Coast of northern Chile, to La Paz, the capital of Bolivia.
Antofagasta's robust production comes after it was forced to tighten its 2018 production guidance, hurt by demand disruptions for the metal, caused by top consumer China's trade war with the United States.
The tit-for-tat trade dispute pushed benchmark copper prices down 17% last year.