Antofagasta expects Chile unrest to dent output, issues dismal 2020 outlook
Copper producer Antofagasta said on Wednesday protests in Chile could cut its production by about 5 000 t, equivalent to less than 3% of third quarter output, due to delays in supplies and travel disruptions for workers.
The London-listed miner, which has four mines in Chile and employs about 19 000 people, kept its full-year forecast unchanged at 750 000 t to 790 000 t of copper this year, but said 2020 output would be lower at 725 000 t to 755 000 t.
Antofagasta produced 197 000 t of copper in the third quarter, 0.8% lower than the previous three months but up on the 188 300 t produced a year earlier.
The company’s flagship mine Los Pelambres is 240 km northeast of Santiago, the capital which has seen anti-government demonstrations this week, with protesters demanding an end to low wages and high living costs.
More protests are expected on Wednesday, along with a general strike called in solidarity. The demonstrations will include the workers’ union in top copper miner Codelco, opening a potentially new, damaging front in the crisis.
Several of the world’s largest miners, including BHP, Anglo American, Teck Resources, have operations in Chile, the world’s largest copper producer.
Union workers at BHP’s Escondida mine, the world’s largest copper operation, held a day-long strike on Tuesday in a show of solidarity with protests but the government said at the weekend that mines were operating normally.
Antofagasta, which is majority-owned by Chile’s Luksic family, has been cutting costs to beat a fall in prices of the metal and has been dealing with several labour negotiations.
This month, the company negotiated with workers in a bid to stave off a strike at its small Antucoya deposit, although union leaders had said there was little progress in talks.
“The Antucoya strike and present unrest in Chile may stall this momentum,” Peel Hunt analyst Peter Mallin-Jones wrote in a note.
Antofagasta said talks with a new supervisors’ union at Antucoya had started and were expected to conclude by the end of the year.
In its outlook, the FTSE 100 miner said grades of ore at its Centinela mine would decline.
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