Chile covid cases surge dents Antofagasta copper output

Chilean miner Antofagasta (LON: ANTO) said on Wednesday copper production in the first quarter of 2021 fell 5.7% to 183,000 tonnes from the same period a year ago, as a recent and sharp spike in covid-19 cases takes its toll.

The South American country’s vaccination campaign against the coronavirus has been one of the world’s quickest and most extensive, yet it doesn’t seem to be helping reduce the number of infections.

Almost 40% of Chile’s total population of 19 million people have now received at least one dose of a covid-19 vaccine, according to statistics compiled by Our World in Data, reflecting one of the highest vaccination rates in the world.

“In March, Chile entered a second wave of covid-19 infections as the number of cases in Chile accelerated, reaching record daily cases since the outbreak of the pandemic,” Antofagasta said in its quarterly production results.

“In addition to the health measures we introduced last year we have further reduced our on-site workforce,” it added.

The number of daily cases in Chile hit a record high on April 9, climbing above 9,000 for the first time since the pandemic began, significantly higher than the peak of almost 7,000 recorded last summer.

The production decline, Antofagasta noted, also reflected lower grades at the company’s flagship Los Pelambres mine, which generated 84,900 tonnes of copper in the first quarter, a drop of 9% year on year.

Copper sales declined 9.6% on quarter to 182,800 tonnes, and net cash costs increased 1.8% to $1.16 a pound.

Optimism

Despite the challenges, the company reaffirmed full-year copper production of between 730,000 and 760,000 tonnes, with net cash costs averaging $1.25 a pound.

“The copper market continues to perform strongly, and we expect this to continue as structural supply and demand dynamics support a tight physical market,” chief executive Iván Arriagada said in a media statement. “In the meantime, we maintain our focus on cost control and disciplined capital allocation.”

The company owned by Chile’s wealthiest family recently managed to escape a strike at Los Pelambres, which produced 372,100 tonnes of copper in 2020, equivalent to around 6% of top copper producer Chile’s total output.

Separately, Antofagasta announced the appointment of María Eugenia Parot as an independent non-executive director. For the last 15 years, she worked with Canada-based Golder Associates, retiring as vice president of Latin America in February 2020.