Antofagasta cuts copper production guidance for 2011

8th Jun 2011 13:46

Antofagasta has warned that the ramp-up of the Esperanza plant in northern Chile is taking longer than expected, causing the group to scale back its total copper production guidance for 2011.The plant, which has operated at nearly 60% of capacity during April and May, produced just 21,000 tonnes of copper in the first five months of the year. But with the ramp-up process not expected to be completed until the second half, current estimates for full-year production are in the range of 80,000-100,000 tonnes of copper.Therefore, group copper production for 2011 is expected to be between 620,000 and 640,000 tonnes, below previous estimates of 715,000.Extensions to the mine from 2012-15 mean that annual production should be increased to 730,000 tonnes, representing a production growth of 65% from 2009 levels."It is the first large-scale green-field copper project to come on-stream since 2008, which reflects the increasing challenge of identifying and developing major, good quality copper assets," said chief executive officer Marcelo Awad.Additionally, Antofagasta expects to become a "significant" gold producer thanks to the Esperanza plant, and thinks that it will produce more than 250,000 ounces a year."Copper, along with many other commodities, has experienced some relative price weakness in recent weeks when compared with the first months of the year. With copper this has partly been driven by destocking within China, which temporarily reduced demand for imports. However, we believe that this period of destocking is likely to be coming to an end, which could have a positive impact on the market," Awad said.---BC