August 30, 2019 / 6:19 PM / 17 days ago

Chile's Codelco profits plunge on falling copper price, labor strife

FILE PHOTO: The logo of Codelco, the world's largest copper producer, is seen at their headquarters in downtown Santiago, Chile March 29, 2018. REUTERS/Ivan Alvarado

SANTIAGO (Reuters) - World top copper producer Codelco saw profits plunge 74% to $318 million in the first half of 2019, the company said on Friday, as the Chilean state miner confronted falling prices globally and labor strife at its flagship Chuquicamata mine in northern Chile.

Outgoing Chief Executive Nelson Pizarro told reporters Codelco had “faced an incredibly challenging second quarter,” in a presentation at the company’s headquarters in Santiago, but said the company was still on track to hit 1.7 mln tonnes of total production in 2019.

Codelco reported it had produced 710,000 tonnes at its own mines in the first half of 2019, a drop of 13 percent versus the previous year. Together with production from Chilean operations co-owned with Anglo American and Freeport, the company’s total production hit 769,000 tonnes in the January to June period.

“In this first half, we got hit with everything. We started with heavy rains and from there the difficulties didn’t let up,” he said.

Codelco is fighting to maintain production from its aging mines with a 10-year, $40 billion plan to overhaul its flagship mines amid sharply falling ore grades and wavering markets.

Despite the challenges, Codelco reported production costs had fallen slightly to $1.42 per pound of copper.

Pizarro said Codelco estimated the copper price per pound would land between $2.47 and $2.88 in 2019, a wide range he blamed on continuing global trade tensions. He said he believed “demand would normalize in a couple of years.”

Reporting by Fabian Cambero; Writing by Dave Sherwood; Editing by Tom Brown and Alistair Bell

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