Chile's Codelco copper output drops in 2018, costs rise

SANTIAGO, March 29 (Reuters) – Chilean state miner Codelco produced slightly less copper in 2018 than the year before, the company reported on Friday, as it continued to contend with declining ore grades at its aging mines.

Chief Executive Nelson Pizarro said the company produced 1.678 million tonnes of copper at its own mines in 2018, down 3.3 percent from the previous year, and a total of 1.806 million tonnes, including production from its joint ventures at El Abra and Anglo American South.

The company, the world’s top copper producer, reported a 2018 pre-tax profit of $2.002 billion, down nearly a third from $2.885 billion the year before, as production costs rose 2 percent and the price of copper fell from 2017.

Pizarro said 18 labor negotiations at its mines affected its bottom line but that productivity increases kept costs in line with industry averages.

Codelco, which produces nearly 10 percent of the world’s copper, is investing billions of dollars to convert its Chuquicamata mine, its second-largest deposit, from an open pit mine into an underground facility.

Pizarro said the Chuquicamata project was approaching 76 percent complete. It is a central part of a 10-year, $39 billion overhaul of the state miner’s key operations as it seeks to maintain production despite rapidly falling ore grades at its deposits.

(Reporting by Fabian Cambero, writing by Dave Sherwood; editing by Steve Orlofsky)

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