Chile Escondida 1H Copper Output Gains 18% on Year to 533,242 Tons

Aug 17, 2012 (Dow Jones) SANTIAGO, Chile--Production at Chilean copper mine Escondida, controlled by global diversified miner BHP Billiton Ltd. (BHP, BHP.AU), rose 18% year-on-year in the first half of 2012 to 533,242 metric tons, the company said Friday.

Production at the world's largest copper mine is recovering from a steep drop last year when Escondida was hit by a workers' strike, stoppages due to inclement weather and a reduction in ore grades, or the amount of copper contained in the mined material.

In 2011, it produced 819,261 tons, down 25% from the previous year.

During the first half of 2012, the mine produced 167,037 tons of copper cathodes, which have a higher added value due to the industrial processes needed to fabricate them. This was a 10% increase from the first half of 2011.

Escondida also produced 366,205 tons of copper contained in concentrates, up 22% from what was produced in the same period last year.

Sales for first half fell 6% year-on-year to $4.31 billion, due to lower international copper prices. In volume terms, sales grew 12%, Escondida said, as a result of the surge in copper contained in concentrate.

During January-June, copper on the London Metal Exchange averaged $3.67 a pound, 14% lower than the $4.26/lb it fetched in the first six months of 2011.

As a result, Escondida's first half net profit fell 20% year-on-year to $1.58 billion.

BHP has a 57.5% stake in the Escondida mine. Anglo-Australian mining company Rio Tinto PLC (RIO, RIO.LN) holds 30% and the remaining 12.5% is held by a Japanese consortium led by Mitsubishi Corp. (MSBHY, 8058.TO).

Production is expected to increase in coming years as BHP and Rio Tinto recently approved investments totaling $4 billion to increase capacity after new resources were found at the mine.