* 2013 gold and copper production ahead of forecasts
* Reassures investors on cost increases
* Shares up 7 pct, top FTSE 100 gainer
(Recasts, adds analyst comment, share price)
LONDON, Jan 29 Chilean miner Antofagasta
beat production targets for both copper and gold in
2013 and said it expected stable costs this year in an industry
struggling to keep spending under control as commodity prices
The production figures were described as "a broad beat" by
analysts and the company's shares rose 7 percent, making it the
biggest gainer in the FTSE 100 index.
Costs at Antofagasta, controlled by Chile's Luksic family,
have been under scrutiny after the firm broke a strong record of
keeping them under control with higher spending last year at its
mines Esperanza and Los Pelambres.
Mining companies have been battling against rising costs as
commodity prices soften after a period when cost increases were
hidden by a price surge on the back of strong demand from China.
But Antofagasta said on Wednesday cash costs before
by-product credits would be $1.80/lb, slightly below the fourth
quarter 2013, while net cash costs would creep up to $1.45/lb
from $1.36/lb in 2013.
Analysts at RBC said the forecast net cash costs were 3
percent below their expectations, while analysts at Bernstein
said keeping costs at the estimated level remained crucial for
"Antofagasta announced a great set of Q4 production results
this morning," Bernstein wrote in a note to clients.
"Cost escalation in presence of deteriorating grades and
timely and on-budget delivery of Antucoya (copper project) will
present the greatest challenges to the company this year," the
Net cash costs at its Pelambres mine jumped 34.9 percent
last year to $1.16/lb, reflecting increased energy costs and
lower gold and molybdenum prices. Net cash costs at Esperanza
more than doubled in 2013, reaching $1.43/lb as a result of
higher spending as new areas of the pit were developed.
Antofagasta estimated it would produce 700,000 tonnes of
copper this year, a repeat of its 2013 guidance, while gold
production is expected to be 270,000 ounces, below 2013
The miner produced 721,200 tonnes of copper in 2013, 3
percent ahead of forecasts. Gold production reached 293,800
ounces, ahead of the forecast 280,000 ounces.
Shares in Antofagasta were up 7 percent at about 879 pence
by 0946 GMT, outperforming the sector which was up
(Reporting by Stephen Eisenhammer; editing by Silvia Antonioli
and Jane Merriman)