LONDON, Aug 29 (Reuters) - Chilean copper miner Antofagasta posted a drop of more than 7 percent in first-half profit, as falling prices and higher exploration costs dented the impact of increased production from its challenging Esperanza project.
Esperanza, a trouble spot since its ramp up began, was hit by fresh operational woes at the start of this year and the miner said on Wednesday would spend an additional $200 to $250 million over 2013 and 2014 to improve processes at the mine and bring it up to full design capacity.
Antofagasta, posting a considerably more modest drop in earnings than its diversified peers and copper rivals, said net income dropped 7.2 percent to $646.1 million for the six-month period, compared with a consensus analyst forecast of $653 million, according to Thomson Reuters I/B/E/S.
Antofagasta, which had already reported increased production in line with its 2012 target, and said revenues rose 3.5 percent to $3.16 billion. But it was cautious with its dividend, up just 6.3 percent to 8.5 cents per share.
Copper prices have fallen some 25 percent from highs touched in February 2011. Antofagasta said the average LME copper price per pound fell almost 14 percent on the same period a year ago.
Antofagasta last month appointed Diego Hernandez, the former head of state miner Codelco as its new chief executive, scooping up one of the biggest names in copper as it battles operational challenges.