* First-half copper output up 4 percent to 788,000 tonnes
* First-half pretax profit down 27 percent to $1.3 bln
* Company says may go to debt market in next 12 months
(Adds CFO quotes on market and financing, cash costs,
SANTIAGO, Aug 29 Codelco, the world's No. 1
copper producer, on Friday reported a rise in its first-half
production, largely due to the contribution of a new mine, but a
slide in the market price of copper metal eroded profits.
The Chilean state-run company said it produced 788,000
tonnes of copper in the January to June period, a 4 percent rise
Improved ore grades and volumes at century-old Chuquicamata
boosted production 26,000 tonnes, while new mine Ministro Hales
contributed 66,000 tonnes despite some start-up problems.
Production fell at some mines, notably Radomiro Tomic, which
is looking to use new bioleaching technology to address falling
volumes as ore grades diminish.
Despite the rise in production, pre-tax profit dropped 27
percent in the first half to $1.3 billion, as the average copper
price in the period fell around 8 percent to $3.14 a pound,
Concerns about lower demand in key buyer China and
geopolitical tensions have weighed on the global copper price
Codelco said it expects demand to stabilize eventually.
"In the long term, we don't see substantial changes in the
copper market fundamentals and we expect it to remain relatively
favorable," Ivan Arriagada, chief financial officer, said at a
press conference following the results.
A short-term boost in global supply was likely to be
absorbed relatively quickly, he added.
The company produces about 10 percent of the world's copper
and nearly a third of Chile's. Overall production in the Andean
country should hit a record 6 million tonnes this year, the head
of the SONAMI mining association said on Thursday.
Nonetheless, Codelco needs to revamp its older mines to keep
them competitive and is looking to spend billions of dollars in
an ambitious multi-year investment plan. That will be partly
financed by the government, which has promised $4 billion over
the next five years, and partly through Codelco's own debt.
"If there is a good opportunity in rates terms we will go to
the debt market in the next 12 months, as we have done in the
past," Arriagada said.
Codelco said its direct cash costs in the first half were
some 8 percent lower than a year ago at $1.58 per pound of
copper. The company is in the middle of a cost-cutting program,
and Arriagada said on Friday that it was in good shape to meet
or exceed its $600 million two-year savings target.
(Reporting by Rosalba O'Brien and Felipe Iturrieta; Editing by
Chizu Nomiyama, Meredith Mazzilli and Leslie Adler)