Chilean miner Antofagasta says it is close to pay deal after profit jump

RIO DE JANEIRO, BRAZIL – Chilean miner Antofagasta expects to reach a pay deal with its workers this month, it said on Tuesday after posting a 12.3% jump in annual profit on high copper and gold prices while its mines performed well despite pandemic-related disruption.

The London-listed miner also declared an increased full-year dividend but remained circumspect on future payouts.

“We are going to maintain discipline on the capital allocation,” finance chief Mauricio Ortiz told Reuters.

He highlighted that Antofagasta’s growth projects were fully funded and debt was down to US$82 million from US$563.4 million at the end of 2019.

The company declared a final dividend of 48.5 cents per share, bringing the total to 54.7 cents, up 22% on the previous year.

Wage talks with unions remain unresolved, however, after workers rejected the company’s latest offer at its Los Pelambres mine.

Though the company said it expects to reach a deal by the end of the month, Ortiz said: “It’s about how we preserve business competitiveness together with unions – and that is the key thing that we need to establish as a fundamental for any negotiation.”

A union representing workers at Antofagasta’s Los Pelambres mine on Tuesday it will agree to extend government-mediated talks into next week in an effort to avoid a strike.

Antofagasta, majority owned by Chile’s wealthy Luksic family, kept its 2021 production, spending and cost expectations unchanged and Ortiz said the company will make the final investment decision on a second concentrator at its Centinela mine in the first half of 2022.

The company’s 2020 earnings were bolstered by copper and gold prices that climbed about 25% last year. Copper is currently trading near 10-year highs at about $9,100 a tonne on rebounding Chinese demand, though gold has shed about 10% so far this year.

Antofagasta’s 2020 earnings before interest, tax, depreciation, and amortisation (EBITDA) rose to $2.7 billion, meeting analyst expectations, Refinitiv SmartEstimate showed.