Chile-based Antofagasta will spend at least $200-million less on capital expenditure (capex) this year, owing to the temporary suspension of the Los Pelambres expansion project, the deferral of sustaining and other growth capex, as well as lower mine development and a weaker Chilean peso.

Antofagasta suspended work on the project earlier this month in response to the health and safety emergency caused by the new coronavirus pandemic. The suspension is expected to be for up to 120 days.

Capex will now be less than $1.3-billion, compared with the original guidance for the year of $1.5-billion, CEO Iván Arriagada said in the London-listed miner’s first-quarter production announcement on Wednesday.

"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,” he pointed out.

Antofagasta lifted copper production by 4.6% quarter-on-quarter to 194 000 t, at a net cash cost of $1.10/lb, which was 27c/lb less than the previous quarter, owing to the weaker peso.

Gold production was 65 100 oz in the first quarter, 4.7% higher than in the first quarter of 2019, while molybdenum production fell to 2 400 t, a decrease of 1 100 t compared with the same period in 2019.

“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. 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 t to 755 000 t guidance range, assuming our mining operations are not required to shut down temporarily,” Arriagada said.

He stressed that Antofagasta had a solid balance sheet with $2.5-billion of cash.

“[We are] in a strong position to confront this unprecedented situation of operational uncertainty and lower copper price environment. We are expanding our cost and competitiveness programme and continue to review all expenditure to preserve our financial strength while operating safely and efficiently."