Return to news listing NEWS RELEASE - 26.10.16

Quarterly Production Report – Q3 2016


Antofagasta plc CEO, Iván Arriagada said, “Antofagasta has had a strong quarter, with copper production up 8.7% versus Q2 2016 and Antucoya reaching production capacity in August. Performance is expected to continue to improve during the final quarter of the year, with full year 2016 copper production expected to be close to the lower end of the original guidance range of 710,000 to 740,000 tonnes.

“Since becoming CEO I have continued to focus our efforts on reducing costs and improving operational efficiencies, and here again we are making good progress with net cash costs decreasing by 5.6% to $1.18/lb. We now expect cash costs for the full year to be $1.25/lb, 5c/lb lower than previously guided.

“As part of these efficiency programmes we have also reviewed our mine plans and wider operational activities to improve decision making and the accuracy of forecasting. This has involved a rigorous assessment of our plans with a focus on profitable tonnes and a higher level of certainty without compromising safety or operational standards. Following this review, production in 2017 is expected to be in the range of 685,000 to 720,000 tonnes.”



  • Copper production in Q3 2016 was 180,600 tonnes, 8.7% higher than in the previous quarter with Antucoya reaching full production in August
  • Group copper production for the year to date of 503,900 tonnes was 9.4% higher than in the same period last year, primarily due to new production from Zaldívar and Antucoya, offset by the closure of Michilla at the end of 2015
  • Gold production was 70,300 ounces in the quarter, a 33.1% increase on Q2 2016 largely due to higher gold grades at Centinela
  • Molybdenum production at Los Pelambres was 1,900 tonnes in Q3 2016, compared to 1,600 tonnes in Q2 2016 with higher grades at Los Pelambres


  • Cash costs before by-product credits in Q3 2016 were $1.54/lb, 1.9% lower than in Q2 2016. This decrease mainly reflects the increase in production and further cost savings achieved through the Cost and Competitiveness Programme (CCP)
  • Year to date cash costs before by-product credits at $1.58/lb were 13.2% lower than the comparable period last year reflecting increased production and cost savings from the CCP
  • Net cash costs were $1.18/lb in Q3 2016, a 5.6% decrease compared with the previous quarter primarily due to lower cash costs before by-product credits and increased gold production and price
  • Year to date net cash costs were $1.23/lb, an 18.0% decrease compared to the same period in 2015 and 2.4% lower than in H1 2016


  • Following the announcement of a forecast 10-20% total cost overrun for the Alto Maipo hydroelectric project, combined with the expected significant decrease in long term energy prices in Chile resulting from the growing contribution of solar and wind power generation, Los Pelambres is reviewing its options with respect to the project and the potential impact on the carrying value of this investment
  • Los Pelambres is working to address charges recently raised by the Chilean environmental authority (SMA). These charges are unrelated to previous court cases and water protests and the company is analysing various alternatives to resolve the situation
  • Labour agreements with a term of three years have been successfully concluded with the workforce union at Antucoya and the supervisors unions at Los Pelambres and Zaldívar


  • Production growth is expected to continue in Q4 2016 and guidance for the year is expected to be close to the lower end of the 710-740,000 tonnes range provided at the beginning of the year
  • Production in 2017 is expected to be in the range of 685-720,000 tonnes reflecting the completion of the Centinela Concentrates throughput expansion and the first full year of production at Antucoya offset by a decline in grade at Centinela and lower throughput at Los Pelambres as it processes a higher proportion of hard ore
  • Net cash costs guidance for 2016 is lowered from $1.30/lb to $1.25/lb
  • Capital expenditure for the current year and 2017 is expected to be below $900 million in both years
Group Year to Date Q3 Q2  
  2016 2015 % 2016 2016 %
Copper production(1) (kt) 503.9 460.4 9.4 180.6 166.2 8.7
Copper sales(2) (kt) 491.7 455.6 7.9 182.3 155.2 17.5
Gold production (koz) 179.7 158.2 13.6 70.3 52.8 33.1
Molybdenum production (kt)  5.2 7.3 (28.8) 1.9 1.6 18.8
Cash costs before by-product credit(3) ($/lb) 1.58 1.82 (13.2) 1.54 1.57 (1.9)
Net cash cost(3) ($/lb) 1.23 1.5 (18.0) 1.18 1.25 (5.6)

(1) Includes pre-commercial production at Antucoya of 12,700 tonnes, which is not included in unit cost calculations
(2) Includes pre-commercial production sales at Antucoya of 11,800 tonnes
(3) Cash cost is a non-GAAP measure used by the mining industry to express the cost of production in US dollars per pound of copper produced

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