Codelco production up, copper price slump trims down profit

Ministro Hales mine.

Chilean state-owned Codelco, the world’s No.1 copper producer, said Friday production during the first-half of the year increased 4%, boosted by its new Ministro Hales mine, but lower copper prices ate into profits.

The giant miner of the industrial metal produced 788,000 tonnes of copper in the January to June period, compared to 758,000 in the same period last year.

Higher ore grades and volumes at century-old Chuquicamata lifted output 26,000 tonnes, while Ministro Hales contributed 66,000 tonnes despite some start-up problems.

Pre-tax profit dropped 27% in the first half to $1.3 billion, as the average copper price in the period fell around 8% to $3.14 a pound, Codelco said.

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The company, which is battling to maintain production levels against a backdrop of falling ore grades at its aging mines, as well as sliding copper price and rising costs, began using bacteria this week to make low-grade ores profitable.

The technology, known as bioleaching, uses microorganisms to obtain copper from sulfide ores, which with current technology are usually considered unprofitable and left unprocessed.

Copper accounts for 60% of Chile’s exports and 15% of gross domestic product.