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Codelco H1 profit jumps 25% YOY on high copper prices

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Codelco H1 profit jumps 25% YOY on high copper prices

High copper prices, higher sales volume and better management propelled Codelco's first-half pretax profit to US$1.24 billion, a 25% year-on-year jump from US$990 million last year, President and CEO Nelson Pizarro said in an Aug. 31 release.

First-half EBITDA also surged 21% to US$2.69 billion, from US$2.22 billion in the comparative period.

The Chilean state miner produced 813,000 tonnes of copper for the first six months, up 2% from last year's 798,000 tonnes — still in line with its semi-annual production goal despite a 3.4% fall in ore law. Including its El Abra and Anglo American Sur SA holdings, total production rose to 875,000 tonnes.

Direct costs in the period increased by US$1.38 per pound of copper, due to the fall of the exchange rate and higher input prices, among other reasons. Pizarro, however, noted that Codelco's direct costs remained competitive as they were 13% lower than the industry average, which exceeded US$1.59/lb of copper.

Pizarro added that the world's top copper miner needs to invest more than US$39 billion annually over the next 10 years for the company to be sustainable for the next 40 years.

"In parallel, we must pay the interest of our debt and continue to comply with all transfers to the treasury," Pizarro said, noting that the company must increase the cash generation from its assets while also focusing on important investments.