Chile's Codelco reports bumper year for profits despite pandemic

SANTIAGO: Chile's Codelco, the world's top copper producer, reported pre-tax profits of $2.078 bln in 2020 and said it had upped output from its own mines by 2% to 1.618 mln tonnes, despite being forced to rely on skeleton crews for almost half the year amid strict measures aimed at curbing the coronavirus outbreak.

The 55% increase in profits came amid a surge in global metal prices and higher sales as global markets including Chile's main buyer China begin to rally from the pandemic.

The company, which turns over all its profits to the Chilean state, told Reuters earlier this week that the recent spike in the price of the red metal as a "good opportunity" to generate cash for investments and hold down debt, but warned it could also drive up the miner's costs.

Codelco said an 8.6% drop in direct cash costs to $1.294 per pound had also helped bolster profits, attributing these primarily to the lower price of inputs, a strengthening peso, upped production and a cash-saving drive by managers.

Codelco said its own copper sales increased by 1.5% year-on-year, and a higher ore grade generated positive performances in its Ministro Hales, Andina, Chuquicamata and Salvador mines, making up for declines in other divisions.