SANTIAGO – Chilean state-owned miner Codelco, the world’s biggest copper producer, posted net income of $875 million in the first half of 2015 – down 33.2 percent from the same period of 2014 – despite reporting a 5.5 percent increase in production and lower costs.
The profit drop was mainly due to a 14 percent decrease in the price of copper, which averaged $2.68 per pound in the first half of 2015, Codelco CEO Nelson Pizarro said Friday in presenting the results.
The price of copper has plunged to a six-year low amid demand concerns stemming from China’s economic slowdown.
He said a cost-cutting plan that was unveiled early this year and enabled a 11 percent reduction in direct costs compared with the first half of 2014 was responsible for a significant chunk of January-July net income
“Had that cost-containment plan not been successfully implemented, the net income we’d be reporting today would be just $272 million,” Pizarro said.
Codelco’s copper production amounted to 910,000 metric tons between January and June, up 5.5 percent from last year despite flooding in northern Chile that halted operations at some mines.
Increased production at the El Teniente mine, whose output rose from 214,000 tons in January-June 2014 to 239,000 tons in the first six months of 2015, as well as a 42,000-ton rise in production at the Ministro Hales mine, offset a 21 percent decline in output at Chuquicamata.
Lower production at Chuquicamata, the world’s biggest open-pit copper mine, was primarily due to a decline in the ore grade.
Codelco’s direct production costs amounted to $1.40 per pound between January and June, a drop of 11.4 percent from the first half of 2014.