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Antofagasta Plc Reaffirms Targets Amid Drop in Production

Chilean copper producer Antofagasta (LSE: ANTO) said Thursday it is still on track to achieve its 2013 targets for production and cash costs, despite a fall in both copper and gold production from its second quarter to third.

For the quarter ending 30 Sept., copper production was 174,200 tonnes, down 3.4% compared with the previous quarter, primarily due to forecast lower grades across the operations and in line with expectations.

Gold production was 67,700 ounces in the third quarter, a nearly 12% dip on the second quarter due to lower grades from its Esperanza mine.

Antofagasta said its forecasts for production in 2013 remain unchanged at 700,000 tons of copper, 280,000 ounces of gold and 8,000 tons of molybdenum.

In an interview with Reuters earlier in October, CEO Diego Hernandez said the industry had struggled due to huge increases in operating costs but that this rise was beginning to wane. In fact, according to Hernandez, project costs have fallen 10 to 15% over the past two years, although he pointed out that even this drop wouldn’t make up for the drastic cost increases from years before.

The nearly £9 billion company has watched its shares struggle so far in 2013, down nearly 35% year-to-date while the FTSE All Share has posted a 16% return.

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>Jill does not own shares in Antofagasta.