Antofagasta expects lower annual copper production after pipeline incident

(Reuters) -Chilean miner Antofagasta Plc cut its full-year copper output target to 640-660,000 tonnes, hit by a leak in an underground pipeline that transports concentrate from its flagship project, combined with water shortage at the mine.

Los Pelambres mine, which accounted for 45% of the group’s production last year, had come under fire from the public, including Chile’s environmental regulator initiating a sanction process against the project for deficiencies associated with tailings management.

Chile, the world’s no. 1 copper producer and no. 2 producer of battery metal lithium, is facing an ongoing water crisis due to historic ongoing drought that has lasted more than a decade and has impacted mining output.

Antofagasta said on Wednesday that the revised production forecast, from 660-690,000 tonnes earlier, incorporates a low probability negative outlook for water availability for the rest of the year.

The FTSE 100 company, which operates four copper mines in Chile, posted a 6.5% fall in second-quarter copper production from prior three months, hit by pipeline incident at Los Pelambres in June.

The miner also raised its net cash cost outlook for the full-year due to an increase in diesel and other input prices.

“The significant decline in copper price since the beginning of June has reinforced our commitment to control costs, particularly during this period of higher input prices and general inflation,” Chief Executive Officer Iván Arriagada said.

Reporting by Shanima A in Bengaluru; Editing by Rashmi Aich