Chilean miner Antofagasta reported a 10.4% decrease in copper output for 2022, due to lower ore grades and a drought in Chile impacting production. The company produced 646,200 tonnes of copper last year, which was at the lower end of its outlook of 640,000 to 660,000 tonnes. The CEO of the company, Iván Arriagada, said that the recent strength in the copper market was a positive start to the year, and that copper usage was expected to increase as the world moves towards green energy and electrification.
Why it matters:
Antofagasta operates four copper mines in Chile, which is the world’s largest producer of the metal. The company expects production to increase in 2023 to between 670,000 and 710,000 tonnes, with net cash costs of USD 1.65/lb, which is higher than consensus expectations. The miner also plans to keep its capital expenditure at USD 1.9 billion this year, unchanged from 2022, despite inflation and higher costs for mine development and desalination expansion at its Centinela and Los Pelambres operations. The decrease in production may impact the global supply of copper, which is a critical component in many industries including construction, transportation and electronics.