Toronto-listed miner First Quantum Minerals reported on Tuesday a 171% jump in its first-quarter profit, powered by higher copper prices from supply worries.
Realized price of copper, a key metal used in wiring, electric vehicles and electronics, rose nearly 37% to $4.45 per pound in the quarter, the company said, on fears that Russia's invasion of Ukraine would disrupt supply chains.
But the company's total copper and gold production fell to 182 210 t and 70 357 oz, respectively, while nickel production rose to 5 122 t.
In Panama, site of its largest operations, the company reached record mill throughput of 7.6-million tonnes in March and completed planned maintenance at its supplying power plant. Following a deal for a contract renegotiation between First Quantum and the Panama government in January, details are pending for the agreement to pass the National Assembly.
First Quantum lowered its production guidance for 2022 to 790 000 t to 855 000 t of copper, from a previous estimate of 810 000 t to 880 000 t.
"Given the current events with the Ukraine conflict and Covid-19 restrictions in China, and most recently the flooding in Durban, the shipping environment and inland logistics remain challenging and continue to impact sales volumes," the company said.
Miners around the world are still struggling with labor shortage caused by the pandemic, supply-chain disruptions and a rise in per unit cost of production.
First Quantum mentioned increased operational costs for fuel, explosives, sulphur, freight, reagents and steel.
"Such inflationary pressures have currently added approximately $0.10/lb to monthly copper cash costs and approximately $0.50/lb to monthly nickel cash cost."
The company said it has a collar structure in place for coal purchases with the ceiling price already exercised, limiting exposure to further increases in coal prices through 2023.
Net earnings attributable to the company's shareholders rose to $385-million, or 56c a share, in the quarter, from $142-million, or 21c a share, a year earlier.