Return to news listing NEWS RELEASE - 20.08.20

2020 Half Year Financial Report

Strong Operating and Cost Performance in a Challenging Environment

Antofagasta plc CEO Iván Arriagada said:

“Following the outbreak of COVID-19 and its impact on consumer markets, the realised copper price was 12.5% lower compared with the same period last year and this impacted our revenue. However, despite these challenges the Group had a strong operating and cost performance with copper production of 371,700 tonnes, sales volumes falling by only 2% compared to the first half of 2019, and a 6% improvement in net cash costs, aided by savings of $78 million from our Cost and Competitiveness Programme.

“As the COVID-19 emergency has unfolded during the period, our focus has been on the health and safety of our employees and contractors, and the communities near our operations. Our growth projects have been temporarily suspended and we have been running our operations with approximately two-thirds of the workforce on-site, with the remainder either quarantining or working remotely. During this period, we also completed our final power contract that will allow all our mining operations to be using 100% renewable power from 2022 at lower cost.

“Work on our growth projects is now accelerating and we are maintaining our full year guidance at the lower end of the original 725-755,000 tonnes range, at a net cash cost of $1.20/lb.

“The interim dividend declared of 6.2 cents per share is consistent with our dividend policy of paying out a minimum of 35% of underlying net earnings.

“Our focus on copper, a critical metal for a modern low-carbon economy, our strong financial and operating position together with our portfolio of growth projects will allow us to deliver long-term value creation for all our stakeholders through the cycle.”


Financial performance

  • Revenue for the first half of 2020 was $2,139 million, 15.3% lower than the same period in 2019 mainly as a result of lower realised copper prices and sales volumes, partially offset by the increase in the realised gold price
  • EBITDA(1) was $1,013 million, $293 million lower than in the same period last year on lower revenue partially offset by lower operating costs due to the weaker Chilean peso, lower input costs and continued tight cost control
  • EBITDA margin(2) was 47.4%, compared to 51.7% in H1 2019
  • The Cost and Competitiveness Programme generated savings of $78 million in the first half of 2020, equivalent to 8c/lb of unit cash costs
  • Net debt decreased by $244 million to $320 million during the period following the refinancing of Antucoya. The net debt to EBITDA ratio fell to 0.15 times
  • Capital expenditure of $549 million was 42% of full year guidance, and while growth projects have been temporarily suspended since March, engineering and procurement work has continued
  • Earnings per share from continuing operations and excluding exceptional items were 17.8 cents per share, this was 12.9 cents per share lower than in HY 2019 due to the fall in EBITDA and higher depreciation and amortisation, partially offset by lower net interest expenses and lower tax 
  • Earnings per share including exceptional items fell from 30.7 cents per share to 13.7 cents per share
  • Exceptional after-tax loss of approximately $61 million with an impact on attributable net earnings of $40 million as a result of the impairment of an indirect 40% interest in the Hornitos coal fired power station prior to its final disposal in 2021. This was part of the value accretive renegotiation of Centinela’s power purchase agreement which as a result will be wholly supplied from lower cost renewable sources from 2022
  • Interim dividend of 6.2 cents per share, equivalent to a payout ratio of 35% of underlying net earnings(2), consistent with our dividend policy

Production and costs performance (as previously announced)

  • The Group as completed 20 months without a fatal accident
  • Group copper production in the first six months of the year was 371,700 tonnes, in line with expectations and 4.0% lower than in the same period last year on lower grades, particularly at Centinela Concentrates
  • Cash costs before by-product credits for the first half of the year were $1.51/lb, a 9.0% improvement on the same period last year primarily due to the weaker Chilean peso, lower input prices and tighter cost control
  • Net cash costs were $1.12/lb for the first half of the year, a 5.9% improvement on the first half of 2019. This was primarily due to lower cash costs before by-product credits, partially offset by lower by-product credits

2020 Guidance (as previously announced)

  • Group copper production guidance is at the lower end of the original 725-755,000 tonnes range, on the basis that no COVID-19 related shutdowns are required during the rest of the year
  • Net cash costs guidance for the full year is $1.20/lb, 10c/lb lower than originally guided, assuming revised production guidance is achieved and the Chilean peso averages 800 pesos to the US dollar for the year
  • Capital expenditure for the year is expected to be less than $1.3 billion, assuming the work on the Los Pelambres Expansion and Zaldívar Chloride Leach projects ramps-up in the second half of the year

COVID-19 (as previously announced)

  • Since the beginning of the outbreak, the Company has coordinated its actions with local and regional government to introduce many new measures to prevent the infection of its workforce and local communities and the transmission of the disease. These measures have included health self-assessments prior to site access, strict social distancing, health monitoring, the provision of hygiene kits, strict facilities cleaning protocols and Company-arranged chartered transport to and from the mine sites. The Company has also established a $6 million fund to support local communities
  • The Company is operating with approximately two-thirds of its workforce at its operations with most of the balance working from home. Mine development and maintenance were initially restricted, but as the operations have adjusted to the new working conditions, work in these areas has resumed

Growth projects in execution

  • As previously announced, the construction work on the Los Pelambres Expansion project has been temporarily suspended since March with some limited work continuing, mostly on the desalination plant at Los Vilos. The project is now restarting in stages during H2 2020, integrating new COVID-19 health protocols. To reduce the risk to water availability, the original design capacity of the desalination plant is being reviewed to facilitate a future phased expansion to 800 litres per second, up from the original 400 litres per second design.

The future capacity increase from 400 to 800 litres per second will be a separate project to the Los Pelambres Expansion project and is expected to be approved once the additional necessary environmental permits have been received. In the meantime, additional pumping capacity and other infrastructure will be installed as part of the Los Pelambres Expansion project to improve the overall capital efficiency and execution time of the two stages of the capacity increase.

The additional capital cost of the changes to the desalination plant and marine works are estimated to be approximately $150 million. In turn, at the time of the restart of construction in August, the suspension of activities to date has already delayed the original project schedule by six months at an additional cost of approximately $50 million.

The COVID-19 restrictions on future construction work require the project to continue with reduced manpower numbers and as this, together with the additional changes to the desalination plant, will impact the construction schedule and costs beyond what is included in the above estimates, the project schedule and cost remain under review. An updated estimate will be provided in Q4 2020.

  • At Zaldívar construction of the Chloride Leach project had just commenced at the time of the COVID-19 outbreak and as a result further mobilisation to site was suspended in March. Activities are now resuming largely as per the original schedule but delayed by approximately six months to the first half of 2022 due to the suspension and integration of fully revised health protocols. The impact of the suspension of activities is expected to be absorbed within the original estimated project cost of $190 million


  • The Company is pleased to have been an active participant in the International Council on Mining and Metals’ (ICMM) working group on the Global Industry Standard on Tailings Management that was released earlier this month. The new standard is an important step in strengthening current practices in the industry for the management of tailings facilities from site selection to after a facility is closed
  • Together with the Hornitos disposal agreement in April, Centinela signed a 100% renewable energy contract which will be effective from 2022 until 2033. This new contract will be value accretive as power costs will be significantly reduced in stages from 2020 onwards. From 2022 all the Group’s mines will use only renewable energy, with Zaldívar being the first to go 100% renewable on 1 July 2020
  • The water situation in central Chile has improved due to substantial rain and snow fall during the last two months. Although this has improved the 2020-21 water balance at Los Pelambres, water usage optimisation and recycling improvements will continue
  • Labour agreements were successfully agreed with the supervisor’s and the largest workers’ union at Centinela and the workers’ union at Zaldívar during June and July. Negotiations with the two other workers’ unions at Centinela will be completed later in the year

Download Results (PDF)

Download Results Presentation (PDF) 


$m 2,138.8 2,525.6 (15.3)


$m 1,012.8 1,305.9 (22.4)
EBITDA margin(1,2)  % 47.4 51.7 (8.3)
Underlying earnings per share(1)   cents 17.8 30.7 (42.0)
Earnings per share   cents 13.7 30.7 (55.3)
Dividend per share cents 6.2 10.7 (42.1)
Cash flow from operations(3)  $m 906.9 1,514.5 (40.1)
Capital expenditure(4) $m 548.6 465.5 17.9
Net debt at period end $m 319.5 517.4


Realised copper price $/lb 2.46 2.81 (12.5)
Copper sales(5) kt 346.8 354.5 (2.2)
Gold sales koz 108.4 148.3 (26.9)
Molybdenum sales kt 4.7 6.6 (28.5)
Cash costs before by-product credits(1)  $/lb 1.51 1.66 (9.0)
Net cash costs(1) $/lb 1.12 1.19 (5.9


Note: The financial results are for continuing operations and are prepared in accordance with IFRS other than as noted in (2) below. 
(1) Non-IFRS measures. Refer to the alternative performance measures section on page 57 to the half-year financial report below.
(2) Calculated as EBITDA/Revenue. If Associates and JVs’ revenue is included EBITDA Margin was 44.1% in HY 2020 and 47.8% in HY 2019.
(3) Includes a VAT tax refund of $274.8 million in HY 2019. Excluding the effect of this one-off refund, cash flow from operations decreased by 26.8%.
(4) On a cash basis.
(5) Does not include 27,400 tonnes of sales by Zaldívar in HY 2020 and 26,900 tonnes in HY 2019, as it is equity accounted.

A recording and copy of the 2020 Half Year Results presentation is available for download from the Company’s website

There will be a Q&A video conference call on 20 August 2020 at 12:00pm BST hosted by Iván Arriagada, Chief Executive Officer, Mauricio Ortiz, Chief Financial Officer and René Aguilar, Vice President of Corporate Affairs and Sustainability. Participants can join the conference call here.

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