SANTIAGO – Chilean State miner Codelco produced slightly less copper in 2018 than the year before, the company reported on Friday, as it continued to contend with declining ore grades and rising costs at its aging mines.
Chief Executive Nelson Pizarro said the company produced 1.678-million tonnes of copper at its own mines in 2018, down 3.3% from the previous year, and a total of 1.806-million tonnes, including production from its joint ventures at El Abra and Anglo American South.
Codelco, the world's top copper producer, reported a 2018 pre-tax profit of $2.002-billion, down from $2.885-billion the previous year as production costs rose 2% and the price of copper fell from 2017. Codelco said it also took a one-time deduction for deteriorating assets of nearly $400-million, for a total drop in pre-tax profits of 44.3%.
Pizarro said at a presentation at Codelco's Santiago headquarters that 18 labor negotiations at its mines had also affected the bottom line but that productivity increases kept costs in line with industry averages.
Pizarro predicted a copper price of $2.95/lb for 2019.
Codelco, which produces nearly 10% of the world’s copper, is investing billions of dollars to convert its Chuquicamata mine, its second-largest deposit, from an openpit mine into an underground facility.
Pizarro said the Chuquicamata project was approaching 76% complete. It is a central part of a 10-year, $39-billion overhaul of the State miner's key operations as it seeks to maintain production despite rapidly falling ore grades at its deposits.
Codelco Vice President Alejandro Rivera said the company would begin applying in May for the environmental permits it needs to begin exploring for lithium on its Maricunga salt flat holding. Rivera said Codelco hoped to have results from those explorations by the end of 2020.
The company's lithium projects are off to a slow start. Codelco has yet to find a partner for either its Maricunga or Perdernales project.