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Top global copper producer Codelco reported on Friday a 50.4% drop in pre-tax profit to $2.606 billion for the period between January and September, hit by lower copper prices and decreased production in some of its mines.
The Chilean state-owned company said that a “significant drop of 12% in the price of copper sales” compared to the previous year explained almost half of the drop in profits.
Accumulated production totaled 1.06 million tonnes, down 10% from a year ago.
The drop was associated with a decrease in grade ore at the company’s Ministro Hales division “due to a change in sequence and a lower recovery of copper”, the company said in a statement.
It added that a lower grade ore and a drop in the “activity and recovery of copper in Chuquicamata division and El Teniente” also affected the firm’s copper production as well as “operational difficulties” with the Chuquicamata refinery and smelter.
The smelter will undergo major maintenance in November, the company added, which will cause further operational problems.
The company, which gives all of its earnings to the state, faced challenges last quarter, with workers striking over safety conditions and environmental pressure growing over its operations in Chile.
Codelco also cut its copper production estimates for the year to between 1.465 and 1.435 million tonnes, a drop compared to the 1.49-1.51 million tonnes it had forecast in August.
The company said its cost rose 21.2% to $1.574 per pound, up from $1.299 the year before due to lower copper production and higher supply costs.
Adding production from Codelco’s participation in the El Abra mine from Freeport McMoRan and Anglo American Sur, the company’s copper production reached 1.136 million tonnes from January to September.
(By Fabian Cambero; Editing by Diane Craft)
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