Codelco H1 pre-tax profit dives on decline in production

Chile’s Codelco has posted a pre-tax profit of $1.7bn for the first six months of 2022, compared with $3bn during the same period in 2021, as it was affected by reduced production and soaring costs.

The state-owned copper mining company’s adjusted EBITDA fell 26.3% to $3.8bn from $5.1.6bn over this period.

Total revenues dipped to $8.7bn from $10bn due to lower sales volume.

Cash costs increased to 150.6¢ per pound from 134.7¢ per pound, driven by a rise in input prices, including electricity and diesel.

The firm said in a statement: “Additionally, lower average realised copper price because of the significant drop at the end of the period contributed to the decline in revenues.”

Codelco’s copper production between January and June 2022 was 736,000t, which is 7.5% lower than the prior year.

In a statement, the company said: “Lower production at Chuquicamata, Ministro Hales and El Teniente were the main drivers of this decline and more than offset an increase at Gabriela Mistral.”

Net cash flows from operating activities decreased to $2.97bn from $3.45bn as a result of increased tax payments and remittances to suppliers.

As of 30 June 2022, the mining firm’s net debt was $16.2bn.

In June, Codelco agreed with union leaders to end a national strike over the decision to close the Ventanas copper smelter.

Said to be the world’s largest copper producer, Codelco is engaged in the exploration, development and extraction of copper-bearing ores and by-products, processing ore into refined copper. It also trades refined copper and by-products.

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