Chilean copper producer Antofagasta said Tuesday it expected to approve an expansion of its Los Pelambres mine later this year as it grew more confident about further increases in the price of the red metal.
Announcing a significant increase in cash-flow as a result of cost-cutting and increased copper production, the company said the $1.05 billion investment would boost production by 55,000 mt/year for 15 years from 2020 by adding a new grinding and flotation circuit to counter the increasing hardness of the ore.
The London-list miner posted EBITDA of $1.6 billion for 2016, up almost 80% from the previous year as revenue rose 12.3% to $3.6 billion, lifted by an increase in copper production.
As reported earlier this year, Antofagasta's mines produced 709,400 mt of copper, a 12.5% increase from 2015, lifted by higher production at its Centinela operation and the addition of its new Antucoya mine and a 50% stake in the Zaldivar mine.
However, production at its flagship Los Pelambres mine fell as the high altitude open pit operation processed harder rocks.
The company also managed to lower net cash costs by 20% to $1.20/lb, aided by increased revenue from its byproducts gold and molybdenum.
Gold output rose 26.6% to 270,900 oz on better grades and throughput at Centinela, while molybdenum production fell 27.3% to 7,200 mt.
For this year, Antofagasta maintained its production outlook of 685,000-720,000 mt of copper, 205,000 oz of gold and 8,500-9,500 mt of molybdenum.
Although the company saw the copper market moving from balance to a slight deficit, which should boost prices, CEO Ivan Arriagada said it would continue to exercise capital discipline.
"Our focus in 2017 is on developing those projects that offer all our stakeholders the best returns, such as the incremental expansion at Los Pelambres," the executive said.
