Minera Escondida

Copper Price
During the semester ending June 30 2009, the average price per pound of copper on the London Metals Exchange (LME) was US$ 1.84, which is 50.1 % lower than the average US$ 3.68 recorded for the same period in 2008.

Production
During the first semester of 2009 copper production at Minera Escondida was 520,899 metric tons composed by 356,798 metric tons of copper contained in concentrate and 164,101 tons of cathodes. This production is 28% lower compared to the 725,177 mt produced during the same period in 2008 (602,620 mt of copper contained in concentrate and 122,557 mt of cathodes). The lower production of concentrate is explained by the combined effect of a lower ore head grade, increased hardness of the ore treated (resulting in lower copper recovery at the concentrator plants), and production problems associated with the Laguna Seca SAG mill concentrator which resulted in the plant operating at lower capacity than design. The SAG mill has been undergoing permanent repair during the months of July and August, 2009. Repairs and testing have progressed according to plan. On the other hand, the increased cathode production is explained by an improved recovery and an increase in the level of activity and ore accumulation in the process stockpiles.

Sales
Total sales decreased from US$ 6,370.8 million in 2008 to US$ 2.518,9 million in the first quarter of 2009, which represents a decrease of 60,5 %. This is due to a lower production of copper and a lower price of copper in the first semester compared to the same period of the previous year. The level of physical sales decreased by 26.2%.

Operational Results and Profits
The company’s operational result decreased from US$ 5,058.2 million in 2008 to US$ 1,292.2 million in 2009, representing a decrease of 74,5 %. Net profits also decreased from US$ 3,897.2 million in 2008 to US$ 1.046,0 million in 2009, which represents a decrease of 73,2 %.

Taxes
Minera Escondida’s Income Tax and Specific Tax on Mining Activities (Royalty) provision through March 2009 amounts to US$ 275.7 million. This represents lower tax payments by 72% compared to the same period through June 2008 when it reached US$ 999.6 million.

Costs
Because of the lower production, the effective C1 unit cost of exploitation per pound of copper sold (payable) increased from 71.8 c/US$ in the first semester of 2008 to 80.6 c/US$ in the same period in 2009. For this period the C1 cost included credits for by-products gold and silver for an amount of US$ 90.3 million, which represented 7.8 c/US$ credit to unit cost.








Minera Escondida is an open pit mine located 170 km southeast of Antofagasta, at 3,100 meters above sea level. Its owners are BHP Billiton (57.5%), Rio Tinto (30%), JECO Corporation (10%) y International Finance Corporation (2.5%). It is operated by BHP Billiton.
www.escondida.cl
www.bhpbilliton.com
www.fme.cl
www.ceim-fee.cl
 

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