Antofagasta reported steady improvement in its second-quarter earnings release with its Antucoya operation reaching commercial production.

“Our decision to concentrate the group’s efforts in 2016 on operational and capital cost control, improved productivity and enhanced operational efficiencies has begun to bear fruit,” said Iván Arriagada, CEO, Antofagasta plc. “For the first half of the year, cash costs before byproduct credits and net cash costs were $1.60/lb and $1.26/lb, respectively, below the respective levels of the previous year. Although we now expect production for the full year to be at the lower end of the range announced in January, we remain confident that we will continue to deliver on our cost control and operational efficiency objectives for the full year.”

Antofagasta’s copper production for Q2 2016 was 166,200 metric tons (mt), a 5.8% increase on Q1 2016 as production increased at Los Pelambres, Zaldivar and Antucoya. The company said the integration of Zaldívar into the group was complete with improvements in recoveries achieved during the quarter. Gold production was 52,800 oz in Q2 2016, a 6.9% decrease on Q1 2016 largely due to lower production at Centinela. Molybdenum production at Los Pelambres was 1,600 mt in Q2 2016, compared to 1,700 mt in Q1 2016 principally due to lower grades, partially offset by higher recoveries and throughput group copper production for the full year is expected to be at the lower end of the 710,000-740,000 mt guided in January, with production for the year weighted to the second half. Installation of the tailings thickeners at Centinela and the ramp-up of Antucoya are proceeding within their planned ranges, Arriagada explained, but inherent risks will persist until both projects are completed.

“Regrettably there was a fatal accident at Antucoya during the quarter and another in the Transport Division in July,” Arriagada said. “A full investigation has now been completed at Antucoya and actions identified during the review are being implemented with direct oversight by senior management.”

Once the repairs to the second thickener are completed at Centinela, throughput is expected to reach the expanded design capacity of 105,000 mt/d of ore on a peak basis during the fourth quarter. In addition, copper grades will be more than 0.60% during the second half of the year as mining moves as planned into a higher grade area of the pit. Throughput will run at the new design capacity on a continuous basis once the third thickener has been completed.

Following commercial production being declared at the beginning of the quarter, Antucoya is ramping up to full capacity of 85,000 mt/y, which is expected to be achieved in the second half of 2016. Improvements to the dust suppression systems are now being implemented and expected to be completed by the end of 2016. Copper production at Antucoya was 14,400 mt in Q2 2016, 13.4% higher than in the previous quarter as higher throughput was achieved despite lower grades and recoveries. During the quarter, the cash costs were $1.82/lb.