August 29, 2012 / 11:31 AM / 5 years ago

New boss bets on growth at home for Chile's Antofagasta

LONDON, Aug 29 (Reuters) - Copper industry heavyweight Diego Hernandez, who took the helm of Antofagasta last month, is betting on growth at home to boost production for the Chilean miner, as it battles to overcome trouble at its flagship mine.

Hernandez, who stepped down as chief executive of Chilean state miner Codelco in May, said Antofagasta had no plans to hold back investment in its new wave of Chilean growth projects, including the promising but costly $1.7 billion Antucoya mine, despite uncertain markets.

“We need to be cautious, but there is no reason to stop all of our projects. We are not, at this moment, close to any execution decision,” he told Reuters. “There is no reason to panic and stop everything.”

Hernandez, striking the conservative tone familiar to Antofagasta investors, said the group had no “urgent” opportunities outside Chile, where it has not had a smooth path.

Late last year it began international arbitration over its Reko Diq project in Pakistan, after the local government rejected its mining licence application.

Hernandez said he expected the copper market to be in balance or marginal surplus next year, as competitors’ projects were hit by delays and held back.

“We are optimistic for the medium to long term,” he said.

“What is sure is that if we go back six months, and all the projects announced at the time were built according to announcements, the risk was a surplus starting in 2014 and lasting for three or four years. That has changed completely because of the delays.”

Hernandez said he did not see major changes to copper treatment and refining charges (TC/RCs), paid by miners to smelters to refine concentrate into metal.

“It is early days because the negotiation will start in October, but we have seen quite low TC/RCs on the spot market,” Hernandez said. (Reporting by Clara Ferreira-Marques; Editing by Kate Kelland)

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