Top Copper Miner Says Annual Output Fell 5.1% on Lower Grades

Codelco, the biggest copper producer, had a 5.1 percent drop in annual output on lower ore grades at its aging mines in northern Chile’s Atacama Desert.

The century-old Chuquicamata mine posted a 20 percent output slump, dragging down the company’s production to 1.647 million tons from 1.735 million tons in 2011, according to a presentation delivered at its Santiago headquarters. Output including Codelco’s share of the El Abra and Anglo Sur mines, slid to 1.758 million tons from 1.796 million tons.

Chief Executive Officer Thomas Keller is spending a record $25 billion to retain Codelco’s No.1 producer status as the state-owned company stops mining in pits exhausted of profitable ore and taps new areas. Overall copper content fell to 0.73 percent last year from 0.8 percent in 2011.

Codelco had capital expenditure of $4.1 billion last year and said its Ministro Hales project is 78.5 percent complete. The company achieved the milestone of handing over $100 billion to the state over its history, Keller said.

A two-week strike at the Angamos port, which has spurred protests of support at other ports in the country, has impeded Codelco shipments, Chief Financial Officer Ivan Arriagada said.

About 30,000 tons of copper is stored at ports awaiting shipment, he said. Industrial action at ports haven’t affected production, the CFO said.

To contact the reporters on this story: Matt Craze in Santiago at mcraze@bloomberg.net; Randall Woods in Santiago at rwoods13@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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