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Ningbo Jintian Copper (Group) Co., Ltd.
Ningbo Jintian Copper (Group) Co., Ltd.

Chile Copper Giant Codelco Profits Surge On Higher Metals Prices

SANTIAGO, Feb 25 (Reuters) – Pre-tax profits for the world's largest copper producer Codelco surged to $7.4 billion in 2021 from $2.1 billion a year earlier, boosted by high global prices for the widely used metal, the Chilean state mining company said on Friday.

Copper prices jumped last year and some analysts see a new supercycle for the red metal as demand rises for its use in electric vehicles.

Codelco, which turns over its profits to government coffers, reported that it produced 1.618 million tonnes of copper at its own mines in 2021, in line with output a year earlier.

Adding production from its stakes in Freeport’s El Abra and Anglo American Sur, total copper production rose to 1.728 million tonnes.

Cash costs increased 2.6% to $1.327 per pound of the metal, Codelco Chief Executive Octavio Araneda said during a virtual press conference.

"This was mainly due to external effects, higher input prices that towards the end of 2021 began to put pressure on the industry's operating costs," he said.

Araneda said fallout from Russia's invasion of Ukraine is not expected to significantly affect Codelco's sales as those countries are not important buyers of the company's copper.

Chief Financial Officer Alejandro Rivera forecast global prices for copper should remain near current levels this year barring a major escalation of the conflict.

Important maintenance work at Codelco’s Chuquicamata smelter is not expected to hit overall production, but it will affect cathode output, Araneda said.

He added that 2022 total copper production should be similar to 2020 and 2021 output.