Antofagasta reports third-quarter copper output fall but keeps guidance

By Tanisha Heiberg

JOHANNESBURG (Reuters) - Chilean miner Antofagasta said on Wednesday output had dropped 4.6% in the third quarter compared with the previous three months and was likely to be at the lower end of its guidance for the year.

Antofagasta produced 169,600 tonnes of copper during the third quarter, down from 177,700 tonnes in the second quarter, mainly due to major maintenance work at its flagship Los Pelambres mine and lower grades at its Antucoya operations.

The London-listed miner said it expected 2020 production to be at the lower end of its original guidance of between 725,000 to 755,000 tonnes while net cash costs are expected to fall below the originally guided $1.20 per pound.

The company, which operates four mines in Chile, said it expected copper production to increase in 2021 in the range of 730,000 to 760,000 tonnes as grades increase at Centinela Concentrates and as COVID-19 health protocols remain in place.

Net cash costs during the third quarter were 5.3% higher at $1.19 per pound.

Copper output of 541,300 tonnes for the year to date is 7.3% lower than in the same period last year, the miner said.

Production of molybdenum - a byproduct of copper mining - increased 9.7% in the quarter to 3,400 tonnes, while gold production fell 16.7% to 38,300 ounces.

Disruptions to mining operations in Chile, the world's largest producer of mined copper, have been minimal, but helped to delay mining projects.

The company is operating with approximately two-thirds of its workforce at its operations.

Antofagasta said around 75% of the original planned numbers are now working on site at its Los Pelambres Expansion project after it was temporarily suspended in the previous quarter, with work also beginning at its Esperanza Sur and Zaldívar Chloride Leach projects.

The miner, which concluded labour negotiations with unions at the joint venture Zaldívar mine and two unions at Centinela during the quarter, said it had recently begun negotiations with the two remaining workers' unions at Centinela.

Supervisors at Centinela agreed to a new contract offer in July, avoiding the possibility of a strike after the union had voted in favour of a walk-out.

Antofagasta said it expects to conclude the talks by the end of the year.

(Reporting by Tanisha Heiberg, editing by Louise Heavens and Philippa Fletcher)