Codelco, Chile's state-owned copper company, the world's largest copper producer, reported its 2021 results on Friday, local time. Codelco achieved a substantial increase in profits in 2021, thanks to high global copper prices.
Data show that the company's pre-tax profit rose sharply to $7.4 billion in 2021 from $2.1 billion a year earlier, and its copper mine production last year was 1.618 million tonnes, unchanged from the same period a year earlier. If you add in Codelco's stakes in Freeport El Abra and Anglo American Group Anglo Sur, the company produced a total of 1.728 million tonnes of copper last year.
Octavio Araneda, chief executive of Codelco, said cash costs rose 2.6 per cent to $1.327 per pound, mainly due to external effects, and higher input prices began to put pressure on the industry's operating costs at the end of 2021.
Araneda predicts that Codelco's copper production this year will continue to be the same as in 2021 and 2020. Since Codelco is the world's number one copper producer, this means that the tight supply situation in the global copper market is difficult to ease in the short term.
Previously released data showed that Chilean copper production fell 1.9 per cent last year, due to labor shortages caused by the novel coronavirus epidemic. However, earthwork and maintenance work is still being carried out in mines around the world to continue production in the event of a shortage of staff, which have been delayed during the outbreak.
Codelco is speeding up inspections of its aging deposits as the Chilean government relaxes its blockade of the epidemic. Araneda said maintenance at the, Codelco Chuquicamata smelter is not expected to affect overall production, but will affect cathode copper production.
Investors are closely watching the impact of the war between Russia and Ukraine on the market, and Araneda believes that the conflict between the two sides is not expected to significantly affect Codelco's sales, as the two countries are not important buyers for the company.
Araneda expects global copper prices to remain near current levels this year unless the conflict escalates seriously.
