Chile’s state copper miner Codelco has slashed its copper output predictions for the year amid expectations of more disruptions in production. The new forecast puts the miner’s annual production at 1.31 million to 1.35 million metric tons of copper from the previous forecast of 1.35 million to 1.45 million metric tons.
This announcement comes after months of declines and just as Codelco reported an 86% drop in pretax profit in the first half of 2023.
Codeldo recently suffered a large rock explosion accident at El Teniente its largest mine, which has impacted productivity on the north side of the mine and held back project development in the mine. The company said that it expects the accident and its aftereffects to hinder production in the mine for the rest of the year.
Codelco saw its average copper sales fall by 3% year-over-year accompanied by an 11.3% contraction in sales volume. In contrast, production costs during the period went up by 41.3%, increasing from $1.50 per pound last year to $2.12 in 2023. This dropped Codelco’s copper output by 14% from last year to 633,000 metric tons and brought its profits for the first half of 2023 down to $329 million.
In addition, the company’s production rate slipped to its lowest level in 25 years during this period amid a series of operational and weather problems coupled with degrading copper ores. Heavy rains in June caused an estimated loss of 7,000 metric tons in copper production and played a major role in Codelco reducing its production estimates for the year.
Of the 7,000 metric tons in lost production output, 5,000 tons came from the company’s Andina mine and 2,000 tons from the El Teniente mine; the two mines combined produce 45,000 metric tons of copper every month.
Coldelco chairman Maximo Pacheco said that the company would have to lower its forecasted output range for 2023. He added that Codelco expected production to pick up in 2024 thanks to delayed projects that will enter into operation next year. In the meantime, the miner is dealing with issues such as heavy rains and flooding that forced it to temporarily halt operations at the El Teniente and Andina mines.
Codelco has also been charged with leading discussions with private companies in the country to increase government control over Chile’s lithium industry by encouraging companies to enter voluntary state-controlled partnerships before their contracts expire.
The dwindling copper ores of a major producer such as Codelco suggest that when exploration companies such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) enter the production phase, there will be no shortage of market for their products.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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