Chile's Codelco reports 86% leap to $1.12bn of profits to September

30th October 2020 By: Reuters

SANTIAGO – Chile's State-owned miner Codelco, the world's largest copper producer, on Friday reported a 86% increase in its profit for the first nine months of the year on Friday, to $1.124-billion, amid an increase in production.

The company, which turns over all its profits to government coffers, said production rose 4% year-on-year to 1.165-million tonnes in the first nine months.

The company said its cash cost fell 11.3% to $ 1.269 per pound between January and September.

Codelco Chief Executive Octavio Araneda said the latest results should generate among workers "energy and conviction" for the "marathon" required as the company faces the combined challenges of falling ore grades, costly overhauls and stringent safety measures necessitated by the pandemic.

The Chilean government is also dependent on its key mining industry generally and Codelco specifically to help fund an ambitious emergency social spending package to counter the fallout of the pandemic and simmering social unrest.

The company said in its earnings statement that "operational continuity, greater processing capacity and improved mineral grades" explained the increase in production.

"During this time ... we achieved higher production, higher sales of copper and by-products from our wholly-owned mines, lower costs and higher productivity," Araneda was quoted as saying in a statement.

Adding in production from its stakes in Freeport's El Abra and Anglo American Sur, total production rose to 1.243 million tonnes to September.

The company added that it was looking for "alternatives to move forward" with its plans to build a desalinator for its northern operations, after saying in November it would tear up its contract with a consortium led by Japanese firm Marubeni.

Other projects, to transform the massive Chuquicamata into an underground mine, maintain production capacity at Andina and build a new level at its flagship El Teniente mine, were back in progress after being stalled during the worst of the coronavirus outbreak, the company said.