Antofagasta PLC on Tuesday bemoaned poor copper production and prices and the impact of inflation on costs, as it reported a drop in both profit and revenue in 2022.

For 2022, the London-based, Chile-focused mining group reported pretax profit of $2.56 billion, down 26% from $3.48 billion a year prior. Revenue also fell, down 22% to $5.86 billion from $7.47 billion the previous year.

Antofagasta attributed this to a 12% decrease in copper sales to 642,500 tonnes from 725,600, as well as a 12% decline in realised copper prices. It also noted the impact of inflation and higher input prices.

Group copper production for the year was 646,200 tonnes, 10% lower than last year, while gold production was 176,800 ounces, down 30%.

Chief Executive Officer Ivan Arriagada said this reflected ‘the expected continuing drought in Chile and the effects of increased input prices, and the pipeline incident at Los Pelambres’.

In June, the company reported a leak in the underground pipeline at Los Pelambres that transports concentrate from the concentrator plant to the port at Los Vilos. The pipeline was immediately shut down and the location of the leak identified.

At the time, full access to the site was being blocked by members of the local community who were in discussion with the local authorities and representatives of the company. Antofagasta was not able to complete repairs until it regained access to the site.

In December, the company yet again told investors that access to Los Pelambres was being blocked by a small group of people, ‘without any connection to any specific incident or situation, but who are requesting compensation to clear access’. It said work at the development was reduced as a result.

Antofagasta now expects 2023 copper output to be between 670,000 tonnes and 710,000 tonnes; and gold between 220,000 ounces and 240,000 ounces.

‘Looking ahead, the Los Pelambres expansion is expected to be in production during Q2 including the new desalination plant which will significantly alleviate the water constraints that we have experienced over the past 18 months. Also, copper and by-product production is expected to increase over the course of 2023 and we expect cash costs before by-product credits to remain in line with 2022. All this is supported by copper’s fundamentals which remain strong, with China showing signs of recovery and with the energy transition underpinning the long-term demand for copper,’ said CEO Arriagada.

The firm declared a final dividend of 50.5 cents per share. This brought the total dividend to 59.7 cents per share, down 58% from 142.5 cents year on year.

Antofagasta shares were trading 0.9% lower at 1,746.00 pence each in London on Tuesday morning.

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