(Adds financial and production details, CEO comments, company
By Fabian Cambero
SANTIAGO, March 31 Chile's state copper company
Codelco posted a drop in annual copper production on
Friday as ore grades declined at its key deposits, but cost cuts
helped it swing to a profit for 2016.
Codelco, one of the world's largest copper miners, said it
produced 1.83 million tonnes of copper in 2016, of which 1.71
million tonnes came from its wholly owned mines. The company
expects a similar level of output this year, Chief Executive
Nelson Pizarro said at a news conference following the results.
That 1.71 million-tonne figure is down around 1.4 percent
from 2015, as the miner digs deeper and scrabbles through poorer
quality ore to keep output flowing.
But costs were lower, with reported production costs per
pound of copper at $1.26 in 2016 from $1.39 in 2015.
That, and a bumper fourth quarter, helped Codelco report a
pretax profit for the year of $435 million, a significant rise
from the previous year's historic loss of $2.19 billion.
That was good news for the Chilean government, said Pizarro.
Codelco was nationalized in the 1970s and returns all its
profits to the state, providing an important source of income to
"We have done what was required of us, and have not got in
further debt ... despite the fall in ore grades and negative
price factors until October," said Pizarro.
But while positive, the results "did not change the
challenging structural scenario" ahead, he said.
Falling prices for copper in recent years have eaten into
Codelco's earnings and forced it to delay some much-needed
investment in ambitious projects.
For 2017, Pizarro said Codelco expected to invest some $2.8
billion, adding the company plans to go ahead with a massive
desalination plant in the northern desert mining region of
The project has received interest from a variety of major
international actors, he said.
(Writing by Gram Slattery and Rosalba O'Brien; Editing by Chizu
Nomiyama and Matthew Lewis)