Press Release

Codelco reported US$2.6bn in surplus and US$4.69bn in Ebitda for 3Q22

Bnamericas Published: Friday, October 28, 2022

By Codelco

Santiago, October 28, 2022.- A production of one million 62 thousand tons of copper, a surplus of US$ 2,606 million and an Ebitda of US$ 4,697 million reported Codelco in the period January-September 2022. In relation to the same period from the previous year, the production figure represents a decrease of 10.4%.

The drop in this last item is mainly associated with a lower grade in the Ministro Hales Division (due to the change in the exploitation plan, due to the collapse of an area of the pit) and a lower recovery of copper, to which is added, in Chuquicamata and El Teniente, a lower ore grade, a reduction in activity and a drop in the recovery of copper in its concentrator plants. Likewise, difficulties in the operation, mainly in the Chuquicamata smelter and refinery, have contributed to reduce production, accumulating a higher level of inventories of products in process.

Direct costs (C1) reached 157.4 US cents per pound (c/lb), with an increase of 21.2% compared to the same period last year, due to lower production of copper and by-products, and the higher price of inputs. Meanwhile, the net cathode cost (C3) reached 251.3 c/lb, which represents an increase of 14.5% compared to 2021, which is explained by the same reasons as the increase in C1, in addition to the negative effect of the exchange rate variation on liabilities, which was offset by lower non-operating expenses.

Added to the foregoing is the significant drop of 12% in the price of copper sales compared to the same period of the previous year—which also affected the results of the Corporation's main mining subsidiaries—which explains almost half from the 50.4% decrease in surpluses, which reached US$ 2,606 million, and from the 36.8% decrease in Ebitda, which reached US$ 4,697 million.

In November, the Chuquicamata smelter will begin a major maintenance that includes the general repair of the boiler, which causes a significant operational discontinuity and accumulation of products in process. Also, during the fourth quarter, it is expected to significantly reduce the inventory in process. With this, the projection of copper production for the year is estimated in the range of between one million 465 thousand and one million 435 thousand tons.

“The results show a complex moment in terms of the market, operation and start-up of the first megaprojects. Our business is no stranger to global contingencies and we have faced major operational disruptions, in addition to the difficulties of starting up projects, particularly underground mining. We have the entire team focused on overcoming difficulties and ensuring a 2023 with the greatest contribution of value to the country. All our capacities and energies are oriented to that”, indicated André Sougarret, executive president of the state company.

Milestones of the period: investment in explorations, labor advances, environmental commitments and new appointments

“They were months of a lot of work, with complex business indicators, but we are making progress in the transformation of a company committed to its future, that challenges itself to protect the environment, that puts people at the center of its work, that manages and values labor relations, which promotes female talent and represents an opportunity for the development of new generations”, said Máximo Pacheco, Chairman of Codelco's Board of Directors.

During this quarter, the board approved US$176 million to invest in national explorations in the 2023-2025 triennium. In the new portfolio, national exploration will be strengthened with a focus on the districts where Codelco already exploits deposits and the search for new geological resources will begin to be deployed in regions where it does not have operations, known as greenfield. About 43% of the work in the triennium will be dedicated to this last line.

In terms of labor relations, during the last quarter the Strategic Pact for Chile signed by the administration and the Federation of Copper Workers (FTC) was reactivated, and which defined four commissions that will deal with key issues for the future and the transformation of the company: competitiveness, human capital, sustainability and diversity and inclusion. On the other hand, at the beginning of August, an agreement was reached with the union leaders of Ventanas for the just transition of the workers of the smelter, in the face of the decision of the board of directors to move towards the cessation of operations of said smelter. plant. The bill that will allow the small-scale mining products of the National Mining Company (Enami) to be treated in facilities other than the Ventanas Division, continues its legislative process.

In line with its sustainability commitments, this quarter the company reported the start-up of the largest electric bus fleet in the mining industry, with 155 pieces of equipment, more than 100 of them manufactured in the country, which generate zero direct emissions and that will transport workers from El Teniente, Chuquicamata and Andina. In addition, Codelco's board of directors added a new challenge to its environmental goals: reduce particulate matter (PM10) emissions by 25% by 2030, an element linked especially to the traffic of heavy vehicles, wind action, loading and unloading of material, blasting and drilling, among other activities.

In the area of corporate governance, changes were made in the company's management during the period, including the appointment of Mary Carmen Llano as the first female vice president of Human Resources and André Sougarret as executive president.

“Codelco is a company admired in the world and a leader in copper production, so we have the enormous responsibility of taking care of it to meet the expectations and demands that we have as a country and as a company. The entire organization is involved and committed to this task, especially at times when we face complex challenges. We have men and women with the talent and experience necessary so that together we can achieve the results that we all expect”, concluded Máximo Pacheco.

Structural projects under construction

In Chuquicamata Subterránea, the works of the initial investment stage were completed, so that part of the project is in the process of completion. Meanwhile, the Level 1 continuity infrastructure reached 28.6% progress and mine development at 37.7%.

In the Teniente Project Portfolio, Andes Norte reached 75.9%; the early works of Diamante, to 99.6%, and of Andesita to 97.2%, while its execution reached 24.9% and 15.2%, respectively.

In Traspaso Andina , meanwhile, with 99.9% progress, the end of the secondary crushing pre-commissioning and the end of the project in March 2023 is projected for this month (October).

In Rajo Inca , whose progress is 37.8%, on October 7 Sernageomin released the restrictions applied after the fatal accident that occurred in July, which allowed the restart of the project's prestripping works.


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