What were operational highlights from Antofagasta Minerals in 2023 and beginning of 2024?

2023 was another strong year for Antofagasta. We marked our 43rd year of operating copper mines and made critical decisions to further develop our two major mining districts: Los Pelambres and Centinela. The significant investments we’ve announced give us a solid foundation for profitable growth to provide the copper needed to enable the energy transition.

The numbers tell a positive story. We delivered strong operational and financial performance in 2023, including a 5% increase in EBITDA and an 11% increase in cash flow from operations, underpinned by higher copper production following the construction of the first expansion phase at Los Pelambres. Our Q1 production and cost performance at our mine sites was in line with our expectations, and we expect Antofagasta’s production profile to increase quarter-on-quarter throughout the remainder of the year.

The next stage of our growth story has begun. In the first quarter of 2024, we started the full construction of the Centinela Second Concentrator Project, which will add a further 170,000 t/y of copper-equivalent production. First copper is scheduled for 2027. In March, Antofagasta Minerals inaugurated a US$2 billion desalination plant at Los Pelambres.

What benefits will the plant bring?

Water scarcity is a significant challenge for the mining industry, particularly in Chile. This project underscores our proactive approach towards addressing the issue. We are moving ahead with our plan to double the desalination plant’s capacity and construct a new concentrate pipeline, following a route that runs along a less populated area. This will help secure the future of Los Pelambres by providing the water from non-continental sources. Importantly, this will help us advance toward our goal of 90% of water use coming from seawater or recirculated sources, while also providing operational stability. Antofagasta Minerals released its Climate Action Plan in March 2024.

What is the vision and what sustainability measures is the firm employing?

The plan reflects our goal to build on the progress we have made and to meet the new and ambitious medium-term targets that we have set: to reduce our Scope 1 and 2 emissions by 50% by 2035, with 2020 as baseline, and to cut Scope 3 emissions by 10% by 2030, using 2022 as a baseline for projecting emissions. As one of the world’s leading copper producers, we are committed to supplying this critical mineral in a responsible and sustainable way.

We were one of the first mining companies in Chile to make a complete transition to renewable energy supply contracts in all our operations, and we plan to keep going. Replacing and reducing diesel consumption in our trucks by piloting a trolly-assist method using electricity, using autonomous trucks which are more efficient, and introducing automation at our mines are keys to the strategy.

How is Antofagasta Minerals planning to take advantage of high copper prices?

The price of copper is only part of our story, as we can’t control prices. What we can control is the way we mine that copper. Keeping our costs down, engaging with communities to ensure a harmonious and mutually beneficial relationship, focussing on our environmental responsibilities regarding water, emissions, and biodiversity, and on being the best operators, partners and employers, are all vital for a sustainable business regardless of where we are in the pricing cycle. Having said that, macro trends such as the need for critical minerals like copper to enable the energy transition are expected to support copper prices over the longer term.

What are Antofagasta Minerals’ objectives for the rest of 2024?

In the short term, we look at the rest of the year with optimism. We believe we are in a strong position to provide an increasing supply of copper, and we are confident that the strategic investments we’ve made in recent months and years will pave the way for the next phase of growth. That includes continuing the development of the future of Los Pelambres following the completion of the first stage of expansion, building out the Second Concentrator at Centinela, and capitalizing on our investment in Buenaventura in Peru, which we expect to add further development options over time. At the same time, our exploration program in Chile is progressing well as we aim to further grow our resource base.