Chilean state miner Codelco reports copper production cuts, plunging profits in 2018

Chilean state miner Codelco produced slightly less copper in 2018 than the year before, the company reported on Friday, as it continued to contend with declining ore grades and rising costs at its aging mines.

Codelco, the world’s top copper producer, reported a 2018 pre-tax profit of US$2.002-billion, down from US$2.885-billion the previous year as production costs rose 2 per cent and the price of copper fell from 2017. Codelco said it also took a one-time deduction for deteriorating assets of nearly $400-million, for a total drop in pre-tax profits of 44.3 per cent.

On Monday, Codelco cancelled a major contract with SNC-Lavalin Group Inc., another potential blow for the Canadian engineering firm as it battles to move past legal issues tied to corruption allegations. "Among the non-compliances are the delay in payments to its subcontractors, delays in the execution of the project and problems in the quality of the works, among others," Codelco said in a news release translated from Spanish.The development is another complication in SNC-Lavalin chief executive Neil Bruce’s effort to steer a new course for SNC-Lavalin that involves growing the company to $15-billion in annual sales and adjusted profit of $5 a share by 2020.

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