LMEWEEK-Antofagasta slows pace of exploration in cost cuts drive

LONDON, Oct (HKSE: 3366-OL.HK - news) 16 (Reuters) - Chilean copper producer Antofagasta Plc (Other OTC: ANFGY - news) has cut back on exploration activities, its chief executive said, part of plans to save about $160 million this year.

Like its peers, London-listed Antofagasta is battling a slide in commodity prices as a result of slowing growth in China, the world's top consumer of industrial metals. London copper prices are recovering from six year lows hit in late August.

Antofagasta Chief Executive Diego Hernandez told Reuters late on Thursday that the company was on track with its cost savings plan for the year.

"We are doing less things than we were doing before. We have reduced our exploration, we continue to do exploration but at a lower pace," Hernandez said.

"Studies we can postpone we have postponed and we have reorganised some areas in our mines and head office to improve productivity and costs."

Antofagasta Minerals, the group's operational division, said earlier this month it was reducing its workforce by around 7 percent to cut costs.

As the industry battles sinking prices, major miners including Glencore (Xetra: A1JAGV - news) and U.S (Other OTC: UBGXF - news) .-listed Freeport have cut production as prices fall towards levels where some operations are no longer economically viable.

But Hernandez said Antofagasta was not planning to suspend its production as the company's operations have positive operating margins.

Family-controlled Antofagasta operates the Los Pelambres mine, which produced just over 400,000 tonnes of copper last year out of Chile's total 5.8 million tonnes. It (Other OTC: ITGL - news) also has smaller operations and is ramping up its new Antucoya project.

Antofagasta's Los Pelambres had been affected by water shortages, but the situation was now improving, Hernandez said.

"In Pelambres area we went through probably four years of drought and this year we have had a normal year in terms of rain and we should recover our water stocks," he said. (Reporting by Olivia Kumwenda-Mtambo. Editing by Jane Merriman)