Codelco's H1 financials improve despite lower output

Although copper production by Chilean state miner Codelco fell in the first half, financial results improved and the company's projects to add 380,000t to its current annual volume in the next five years remain on track.

Output of 100% Codelco-owned mines reached 579,785t in H1, down 8.4% year-on-year. Considering Codelco's 20% participation in Anglo American Sur and 40% in El Abra, output reached 628,000t, an 8.2% decrease.

However, a favorable copper price, lower operational costs and improved management boosted the financial results. Gross profit rose 36% to US$2.1bn and consolidated profits 301% to US$282mn, according to a press release.

Sales of molybdenum, other byproducts and services fell, however.

“These good financial results encourage us to maintain our efforts. We have strengthened our plans for intensive monitoring of operations and critical support in order to meet our production goals. With these plans in place, we are working to ensure that, starting in the second half of the year, production will begin its long-term growth rate, rising progressively to reach a level of 1.7Mt by 2030,” CEO Rubén Alvarado said in the release.

Last year, Codelco registered 1.32Mt from its own mines and 1.42Mt when adding output by Anglo American Sur and El Abra.

STRUCTURAL PROJECTS

Improved management led to an increase in the Andina concentrator processing capacity from 66,000t/d to 80,000t/d in H1, while production at the underground Chuquicamata mine increased from 46,000t/d to 53,000t/d.

Currently, the Traspaso Andina project's second crushing line, which came into operation in April and replaced the primary crushing system and ore transportation due to a change in the pit's orientation, remains in the ramp-up phase.

Progress at the first phase of level 1 infrastructure at the Chuquicamata underground operation reached 61.6%. Work to turn the open pit mine into an underground operation continues.

The Andesita mine level, part of plans to deepen the El Teniente deposit, registered progress of 49.5% and Andes Norte of 75%. Production will start in October and December.

Rajo Inca, which will allow the Salvador division to remain in operation with the open-pit extraction of the remaining resources of the Indio Muerto deposit, is 82.5% complete and preparation is underway for the start-up of the concentrator in September.

A desalination plant Codelco is building in Antofagasta region to supply its northern operations from 2026, registers progress of 44.1%. The first phase will have capacity of 840l/s.

LOWER COSTS AND PRODUCTION

Lower costs were mainly due to a favorable exchange rate and lower prices of inputs, such as electricity and fuels.

Lower production was due to the following reasons:

• paralysis of trucks in Radomiro Tomic between March and June after a fatal accident;
• lower contributions from the El Teniente underground mine after a rockfall in 2023;
• sales of inventories and lower ore grades at Ministro Hales;
• heavy rains in May and June in the center-south;
• delay of Rajo Inca start-up, originally scheduled for 2023.