Antofagasta shares slip as half-year earnings knocked
Copper production was hit by lower grades as well as a pipeline blockage.
Shares in Antofagasta slumped on Tuesday after the Chilean miner posted a sharp fall in half-year earnings.
The group saw earnings drop 16% to 904.2 million US dollars (£706 million) in the six months to June 30 as it was stung by higher costs and lower production output.
Costs were up due to a stronger Chilean peso, while copper production fell 8.5% and gold production dropped 36%.
Copper production was hit by lower grades as well as a pipeline blockage at the Los Pelambres mine, with gold saw lower grades from Antofagasta’s Centinela mine.
Shares dipped more than 4% in morning trade.
Antofagasta boss Ivan Arriagada said: “As we have guided, this year is a tale of two halves.
“The first half, on which we are reporting, is expectedly softer due to lower sales tonnes and grades and higher costs, but we are expecting tonnages and unit costs to improve substantially during the second half and well into 2019 as mined grades increase in line with our mine plan.
Revenue rose 3.6% to 2.1 billion US dollars.
Despite the fall in interim copper production, Antofagasta is maintaining its full-year guidance at between 705,000 tonnes and 740,000 tonnes, with grades set to improve.
Antofagasta also cited “considerable market uncertainty” over international trade as US President Donald Trump and China up the ante in raising tariffs on each other’s goods.
“In the shorter term, there is considerable market uncertainty with the outcome of current international trade negotiations unclear.
“However, so far no significant impact has been seen on copper demand that can be attributed to this uncertainty, although some positional financial trading is apparent,” it said.