Chile’s Codelco posted a pre-tax profit of $1.7 billion for the first six months of 2022, compared to $3 billion in the same period of 2021, as it was hit by a production cut and skyrocketing costs.
The state-owned copper mining company’s adjusted EBITDA fell 26.3% to $3.8 billion from $5.1.6 billion in the period.
Total revenue fell to $8.7 billion from $10 billion due to lower sales volume.
Cash costs increased from 134.7¢ per pound to 150.6¢ per pound due to higher input prices, including electricity and diesel.
The company said in a statement, “Additionally, lower average realized copper prices due to the significant decline at the end of the period contributed to lower revenues.”
Codelco’s copper production between January and June 2022 was 736,000 t, 7.5% lower than the previous year.
In a statement, the company said, “Lower production at Chuquicamata, Ministro Hales and El Teniente were the primary drivers of this decline and more than offset an increase at Gabriela Mistral.”
Free cash flow from operating activities decreased to $2.97 billion from $3.45 billion due to higher tax payments and supplier rebates.
As of June 30, 2022, the mining company’s net debt was $16.2 billion.
In June, Codelco agreed with union leaders to end a nationwide strike against the decision to close the Ventanas copper smelter.
Considered the largest producer of copper in the world, Codelco is engaged in the exploration, development and extraction of ores and by-products containing copper, transforming the ore into refined copper. It also markets refined copper and by-products.