Business

Antofagasta profits hit by lower copper prices

The copper mine 'La Escondida' in the Antofagasta region, 1800 km to the North of Santiago
Image caption Weaker prices and rising costs have hit miners' profits

Chilean copper miner Antofagasta said half-year profits dropped amid falling metal prices, as well as higher production and exploration costs.

Pre-tax profits were down 7.6% to $1.6bn (£1.04bn), despite a 3.5% rise in revenues from higher copper production volumes, it said.

The weaker results follow a trend among commodity producers and traders as a global economic slowdown crimps demand.

Shares in Antofagasta were down 0.74% as results slightly missed forecasts.

Copper prices have dropped about 25% from highs reached in early 2011. The average copper price per pound traded on the London Metal Exchange fell nearly 14% on the same period a year ago, said Antofagasta.

But it said it was on track to achieve copper output of 700,000 tonnes this year.

Meanwhile, rising costs at its flagship Esperanza mine ate into the company's bottom line. The group expects to spend up to $250m in 2013-2014 to improve some of the machinery used for processing copper and gold that is extracted there.

Antofagasta is also spending cash on exploration and feasibility studies at the Centinela Mining District in Chile for future growth opportunities.

Last month, the firm appointed Diego Hernandez, the former head of state-owned copper firm Codelco, as its new chief executive.

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