NEWS RELEASE, 20 FEBRUARY
2024
FULL-YEAR RESULTS FOR THE
YEAR ENDED 31 DECEMBER 2023
STRONG PERFORMANCE WITH
HIGHER YEAR-ON-YEAR EBITDA
AND FINAL DIVIDEND OF 24.3
CENTS PER SHARE
Antofagasta plc CEO Iván Arriagada said:
"Antofagasta
delivered strong performance in 2023 including a 5% increase in
EBITDA[1] and an 11% increase in cash
flow from operations. Our cost and competitiveness programme
continues to deliver results, generating cost benefits of $135
million during the year, the equivalent of a 9c/lb savings on the
Company's cash cost base.
"With a strong balance sheet, the Company is well positioned
as it enters a new phase of growth. This next growth stage includes
continuing the development of the future of Los Pelambres following
completion of the Los Pelambres Phase 1 Expansion and initiating
the construction of the Centinela Second Concentrator project.
"Across our operations, we have achieved a record year of
safety performance and we have made progress on increasing the
number of female employees to 23.6% of our workforce as of the end
of 2023. Our efforts to decarbonise our business over the year
achieved a number of key milestones, namely the publication of our
inaugural Scope 3 emissions estimate and detailed studies that
enabled us to publish our updated emissions reduction
targets.
"Copper prices in 2023 showed reduced volatility, with prices
displaying a high degree of stability in the second half of the
year. Over the medium to long-term, we continue to believe in
copper's fundamental role in the energy transition, helping to
decarbonise the global economy.
"The outlook for the Company and its shareholders is positive
- we have a solid pipeline of copper growth projects, a strong
balance sheet, a focus on costs that will underpin the delivery of
those projects and long-standing relationships with local
communities. The strength of the business has allowed us to
reaffirm our commitment to our dividend policy, and with this in
mind, the Board has recommended a final dividend of 24.3 cents,
equivalent to a total payout ratio of 50% for the year - reflecting
our confidence in the future prospects of our
business."
|
YEAR ENDING 31 DECEMBER
|
|
2023
|
2022
|
%(4)
|
|
Revenue
|
$m
|
6,324.5
|
5,862.0
|
7.9
|
|
EBITDA(1)
|
$m
|
3,087.2
|
2,929.7
|
5.4
|
|
EBITDA margin(1,
2)
|
%
|
48.8%
|
50.0%
|
-1pp
|
|
Underlying earnings per
share(1) (continuing operations
excluding exceptional items)
|
cents
|
72.0
|
59.7
|
20.6
|
|
Profit before tax
(including exceptional items)
|
$m
|
1,965.5
|
2,558.9
|
(23.2)(5)
|
|
Earnings per share
(continuing operations including exceptional
items)
|
cents
|
84.7
|
155.5
|
(45.5)(5)
|
|
Dividend per share
|
cents
|
36.0
|
59.7
|
(39.7)
|
|
Cash flow from continuing
operations
|
$m
|
3,027.1
|
2,738.3
|
10.5
|
|
Capital
expenditure(3)
|
$m
|
2,129.2
|
1,879.2
|
13.3
|
|
Net debt at year
end(1)
|
$m
|
1,159.8
|
885.8
|
30.9
|
|
Average realised copper
price
|
$/lb
|
3.89
|
3.84
|
1.3
|
|
Copper sales
|
kt
|
667.2
|
642.5
|
3.8
|
|
Gold sales
|
koz
|
204.9
|
174.7
|
17.3
|
|
Molybdenum sales
|
kt
|
11.1
|
9.2
|
20.6
|
|
Cash costs before by-product
credits(1)
|
$/lb
|
2.31
|
2.19
|
5.5
|
|
Net cash
costs(1)
|
$/lb
|
1.61
|
1.61
|
-
|
Table notes: The financial results are unaudited and prepared
in accordance with UK-adopted International Accounting Standards,
unless otherwise noted below.
(1)
Alternative
performance measures as detailed on page 65 of this Full-year
results announcement.
(2) Calculated as
EBITDA/Revenue. If Associates and JVs revenue is included the
EBITDA margin was 46.1% in 2023 and 46.7% in
2022.
(3)
On a cash
basis.
(4)
Figures shown
are percentages unless stated otherwise.
(5) Year-on-year
decrease relates to the recognition of Reko Diq proceeds in 2022;
see page 10 for more information.
FULL YEAR 2023
HIGHLIGHTS
Financial performance
· Revenue for the full year
was $6,325 million, 8%
higher than in 2022 reflecting an increase
in sales of both copper and by-products, in addition to higher
pricing for copper and by-products.
· EBITDA[2] was 5% higher at $3,087
million compared with 2022, driven
by increases in both sales and pricing, partially offset by a rise
in cash costs.
· EBITDA
margin[3] decreased to
48.8% from 50.0% in 2022.
· Cost and Competitiveness
Programme (CCP) generated benefits of $135 million in
2023 (2022: $124 million),
comprising $107 million of cost savings and $28 million of
productivity improvements. A target for the CCP has been set at
$200 million in 2024, which is expected to help the Company to
maintain cash costs in line year-on-year.
· Profit before tax excluding
exceptional items increased by 11% to $1,798
million, as a result of increases
in both sales and pricing, partially offset by a rise in cash
costs.
· Profit before tax including
exceptional items decreased by 23% to $1,966
million, with this year-on-year
movement principally related to the recognition in 2022 of an
exceptional gain relating to the disposal of the Reko Diq
project.
· Cash flow from operations
was $3,027 million, 11% higher than
in 2022 primarily as a result of the Company's higher EBITDA during
the year, and a minor positive variance in working capital
movements in 2023.
· Low net debt to EBITDA ratio
maintained, with a year-end 2023 figure of 0.38x (2022:
0.30x). Net debt was $1,160
million at the end of the period compared with
net debt of $886 million as of 12 months previously.
· Capital expenditure of
$2,129 million[4] in 2023,
compared with $1,879 million in 2022, reflecting
the Los Pelambres Phase 1 Expansion, construction of which was
completed during the year, and mine development work at
Centinela.
· Underlying earnings per
share from continuing operations and excluding exceptional
items2 of 72.0 cents, representing a 21% increase year-on-year (2022: 59.7
cents).
· Earnings per share from
continuing operations including exceptional items were 84.7
cents, 46% lower than in 2022,
which primarily relates to the recognition in 2022 of an
exceptional gain relating to the disposal of the Reko Diq
project.
· A recommended final dividend
of 24.3 cents per share, in line
with the Company's dividend policy of distributing at least 35% of
earnings. The proposed final dividend is subject to approval by
shareholders at the Company's AGM in May 2024, and if approved,
would bring the total dividend for the
year to 36.0 cents per share (50% of underlying earnings per
share).
Operating performance (as
previously announced)
·
The Group continues to prioritise the health and
safety of its workforce, achieving a strong performance in safety
metrics during 2023, with no fatalities during the year (2022:
zero) and the Group's lost time injury frequency rate (LTIFR) of
0.63 representing a 25% reduction year-on-year. Recent safety
highlights within the Group include the completion of more than 39
million hours worked on the Los Pelambres Phase 1 Expansion Project
with a LTIFR of less than 1.0, and our Transport Division reducing
its incidence rate for lost time injuries by more than 50% in 2023,
resulting in a LTIFR of 0.9 (2022: 2.1).
·
Group copper production for the full year was
660,600 tonnes, 2% higher than the previous year, with an
increasing contribution from Los Pelambres, as the Phase 1
Expansion Project ramps up.
·
Gold production for the full year 2023 was
209,100 ounces, 18% higher than 2022 due to higher gold grades at
Centinela.
·
Molybdenum production for the full year 2023 was
11,000 tonnes, representing a 13% increase year-on-year due to
higher throughput rates at Los Pelambres and higher recoveries at
Centinela.
·
Cash costs before by-product credits in the full
year 2023 were $2.31/lb, 5% higher than the prior year, primarily
due to local inflation, appreciation of the Chilean peso and the
conclusion of a number of 3-year labour agreements.
·
Net cash costs for the full year 2023 were
$1.61/lb, in line with 2022 and ahead of guidance for the year,
reflecting a balance of higher underlying cash costs before
by-products, alongside higher production and pricing for
by-products.
2024 Guidance (as previously
announced)
·
Group production in 2024 is expected to be
670-710,000 tonnes of copper. Output of by-products is expected to
be 195-215,000 ounces of gold and 11-12,500 tonnes of molybdenum.
The expected increase in copper production in 2024 principally
reflects the addition of the Los Pelambres Phase 1 Expansion
Project in 2023, with increased water availability and ore
processing capacity expected in 2024.
·
Group cash costs in 2024 before by-product
credits are expected to be $2.25/lb, in line with 2023, with the
positive impact of higher production balanced by a short-term
reduction in ore grades at Los Pelambres.
·
Group net cash costs in 2024 are expected to be
$1.60/lb, with by-product credits expected to remain in line with
2023.
·
In 2024, consolidated Group capital expenditure,
which excludes Zaldívar, is expected to be $2.7 billion, with
sustaining and mine development expenditure broadly in line with
2023, and as development expenditure commences on the Centinela
Second Concentrator and on the other growth projects at Los
Pelambres and Centinela. This figure does not reflect any potential
reduction in capital expenditure as a result of the process to
outsource Centinela's water supply.
Projects and capital expenditure[5]
·
Centinela Second
Concentrator: The approval of the
Centinela Second Concentrator Project was announced in December
2023, which is an investment of $4.4 billion that we expect to add
170,000 tonnes of copper-equivalent production[6] to the Company's portfolio,
with a long-term financing package designed to mirror this
project's long-term returns. Critical path works began immediately
following the project's announcement, with full construction
(covering 2024-2027) to commence after the execution of definitive
project finance documents by the end of Q1 2024.
If the Company elects to proceed
with the outsourcing of Centinela's water assets, an estimated
amount of $600 million in cash will be received for the divestment
of the existing water infrastructure, and the project cost will
reduce by approximately $400 million, considering that the
investment required to expand the existing water system to supply
the Second Concentrator will be undertaken by a third party.
Further details are provided in the Company's announcement dated 20
December 2023.
·
Encuentro mine
development: The second
concentrator will initially source ore from the recently opened
Esperanza Sur pit and later from the Encuentro pit. Details
relating to the mine development of the Encuentro pit are provided
on page 16 of this report. As announced in December, this project
requires an additional investment of $1 billion over a period of
3-4 years from 2025 and will further enable Centinela to achieve
the development potential of its extensive mineral resource
base.
·
Los Pelambres
desalination plant increase (800l/s): This project includes the doubling of capacity from the
current 400 litres per second (l/s) and a new 62 kilometre section
of pipeline between the El Mauro tailings dam and the Los Pelambres
processing plant, which was not required for the first phase of the
desalination plant but is required for this phase. Expansion of the
desalination plant to 800l/s would substantially remove Los
Pelambres' need to extract water from continental sources, and
therefore enable the Company to achieve its ambition of 90% of
water use coming from seawater or recirculated sources. The
estimated capital cost of this project is $1.0 billion, spread over
four years. Construction is expected to start in 2024 and to be
completed in 2027, with the majority of work expected in
2025-2026.
·
Los Pelambres
concentrate pipeline and El Mauro enclosures:
As previously disclosed, the Company intends to
replace the existing concentrate pipeline and build certain planned
enclosures at the El Mauro tailings storage facility. These works
will require expenditure of approximately $1.0 billion over the
period of 2024-2027.
·
In addition to the aforementioned projects, we
expect that capital expenditures on sustaining and mine development
activities will be in the range of approximately $1.0-1.5 billion
per annum until completion of the Second Concentrator
Project.
·
Based on the aforementioned projects, total
capital expenditure in 2025 is expected to be in the range of
$3.5-3.9 billion, subject to adjustments related to inflation, cost
escalation and detailed engineering studies. Capital expenditures
in 2026 are expected to decline year-on-year, before decreasing
further from 2027 as projects are successfully delivered. The
figures provided here are for illustrative purposes, and the
Company will continue to formally confirm guidance for annual
capital expenditures in its usual manner.
Sustainability
·
Development of a decarbonisation strategy during
2023, and through this work, the Company has been able to publish
updated emissions reduction targets - including a 50% reduction in
Scope 1 and 2 emissions[7] by 2035, which has been set on an absolute basis, and
considers the Company's planned increase in production during this
time. The Company has also announced its inaugural Scope 3
emissions target, which is to target a 10% reduction of this
category of emissions (projected basis) by 2030.
·
At Los Pelambres, following construction of the
Company's desalination plant, sea water withdrawals represented
approximately one third of total withdrawals in 2023 (2022: zero)
as this facility began its ramp up during the year. The Company
intends to double capacity of this facility to 800l/s to achieve a
level of 90% of water use across the Group from seawater sources or
recirculated water. The Environmental Impact Assessment (EIA) for
this project was approved by the authorities in Chile in late
2023.
·
We continue to advance the level of gender
diversity in our workforce, with the proportion of women rising to
23.6% in 2023 (2022: 20.4%).
Legislative (as previously
announced)
·
In May 2023, the Chilean Senate and the lower
house of Congress approved the proposed revision to Chile's mining
royalty bill and Presidential approval was confirmed in August.
Further details are provided in the Company's half-year results for
2023.
·
In December 2023, Chileans voted to reject a
proposed constitution and, as a result, the country will now
continue with the existing constitution, which has been in place
for several decades.
Corporate update
·
In November 2023, the EIA was approved for the
project to double the size of the Los Pelambres' desalination plant
to an instantaneous design capacity of 800 litres per second, as
well as replacing the concentrate pipeline and the construction of
certain planned enclosures at the El Mauro tailings storage
facility.
·
The Company announced in December 2023 that it
had entered into transactions in the secondary market to acquire
beneficial ownership of approximately 19% of the outstanding shares
of Compañía de Minas Buenaventura S.A.A. (Buenaventura).
Buenaventura is Peru's largest, publicly traded precious and base
metals company and a major holder of mining rights in Peru. This
investment is in line with the Company's strategy of prioritising
exploration and investment in the Americas. The Company currently
holds 18.2 million shares of Buenaventura, representing the
equivalent of approximately 7% of Buenaventura's issued share
capital, and has an agreement in place to acquire up to an
additional 30 million shares, representing approximately an
additional 12% of Buenaventura's issued share capital. Further
information is provided in Note 3 of the Accounts.
·
In early 2024, the Company received notification
that its Declaration of Environmental Impact (DIA) for the
application to align the mining and water permits at Zaldívar had
been approved.
·
Total mineral resources increased by 345 million
tonnes during the year, predominantly related to work conducted at
Los Pelambres.
·
The Company continues to progress test work on
its patented Cuprochlor-T® technology for the leaching of primary
sulphides, which has now achieved recovery rates of more than 70%
after 220 days. The Company is now evaluating the feasibility of
applying this technology across other mining operations, including
for third parties.
·
On 31 January 2024, during regular cleaning
activities prior to scheduled maintenance of the concentrate
pipeline that connects the processing plant at Los Pelambres to the
Company's port at Los Vilos, concentrate material was detected that
was stopping the normal transit of concentrate. This material has
now been successfully cleared, with filtering of concentrates at
the Company's port facilities expected to resume in the coming
days. Mining and processing operations at Los Pelambres continued
to operate unaffected throughout this process, with concentrates
being stockpiled at the processing plant in pre-existing stockpile
locations, with sufficient storage capacity to maintain operational
continuity. As a result of the delay to deliveries to the Company's
port, a portion of the Company's concentrate filtered production
and sales from Q1 2024, estimated to be approximately 20,000 tonnes
of payable copper, will be rescheduled throughout the rest of the
year. The Company confirms that guidance for 2024 remains
unaffected.
Full-Year Results Presentation and Call
A copy of the 2023 full-year
results presentation is available for download from the Company's
website (www.antofagasta.co.uk).
There will be a presentation and
Q&A at 9:00am (UK) today, which will
be hosted by Iván Arriagada - Chief Executive Officer, Mauricio
Ortiz - Chief Financial Officer and René Aguilar, Vice President -
Corporate Affairs and Sustainability. Attendance can be in-person
or virtual. Further details can be found
here.
Register on our website to receive
our email alerts http://www.antofagasta.co.uk/investors/email-alerts/
FINANCIAL AND OPERATING REVIEW
2023 FINANCIAL
HIGHLIGHTS
Revenue in 2023 was $6,325
million, 8% higher than in 2022, reflecting higher sales volumes
for both copper and by-products, in addition to higher
pricing.
EBITDA was $3,087 million,
representing a 5% increase year-on-year.
Profit before tax (excluding
exceptional items) increased by 11% to $1,798 million, as a result
of increases in both sales and pricing, partially offset by a rise
in cash costs.
Profit before tax (including
exceptional items) was $1,966 million, 23% lower than in 2022,
principally reflecting the recognition of an exceptional gain in
2022 related to the sale of the Company's interest in the Reko Diq
project.
Earnings per share from continuing
operations (excluding exceptional items) for the year were 72.0
cents, a year-on-year increase of 21% compared with
2022.
Earnings per share from continuing
operations (including exceptional items) for the year were 84.7
cents, a year-on-year decrease of 46% compared with 2022,
reflecting the recognition of an exceptional gain in 2022 related
to the sale of the Company's interest in the Reko Diq
project.
Cash flow from continuing
operations was $3,027 million, an 11% increase compared with 2022,
which principally relates to higher EBITDA.
SUSTAINABILITY
Safety and health
The Group continues to prioritise
the health and safety of its workforce, achieving a strong
performance in safety metrics during 2023, with no fatalities
during the year (2022: zero). The Group's lost time injury
frequency rate (LTIFR) decreased to 0.63, representing a 25%
reduction year-on-year. Recent safety highlights within the Group
include the completion of more than 39 million hours worked to date
on the Los Pelambres Phase 1 Expansion Project with a LTIFR of less
than 1.0, and our Transport Division reducing its incidence rate
for lost time injuries by more than 50% in 2023, resulting in a
LTIFR of 0.9 (2022: 2.1).
Communities
Creating shared social value is
key to the success of our business and is central to our strategy.
The Company aims to contribute to social and economic development
in the local communities in which it operates through proactive
engagement based on trust, transparency, respect and acknowledgment
of diversity, and in collaboration with our communities, local
organisations and authorities.
In 2023, as part of its strategy
relating to social engagement, the Company developed its community
relations programme for 2024 at Los Pelambres and across the
Group's four operations in the Antofagasta Region. This complies
with the standards we defined as a Group for the further
development of a productive relationship with the neighbouring
communities.
In 2023, in the Choapa Region
where Los Pelambres is located, the Company expanded its efforts
through the APRoxima and Confluye programmes to ensure continuous
availability of water for human consumption and irrigation in the
severely drought-hit local area. Confluye is a programme that works
to promote projects with the Water Users' Boards of towns and other
public services in Choapa. During 2023, the programme supported the
improvement of 14 kilometres of irrigation canals that ensure the
availability of over 13,000m3 of water, benefitting
local farmers.
During 2023, we carried out impact
evaluations for the APRoxima programme (water for human consumption
in Choapa) and the Los Pelambres scholarship programme. At our
operations in the north of Chile, we measured our processes related
to community engagement, evaluating the Dialogues for Development
(Diálogos para el Desarrollo, the main mechanism for dialogue and
participation) programme in the towns of María Elena and Sierra
Gorda. A total of 18 programmes were assessed, and in each
instance, a net positive social return on investment (SROI) was
recorded. In addition, further improvement plans have been
developed for each programme that will allow us to monitor and
continuously improve the initiatives deployed in each local
area.
The "En Red - Digital Community"
programme consists of a number of initiatives and aims to address
the digital infrastructure and skills deficit in rural and
vulnerable communities in the vicinity of our operations. In 2023,
efforts were focussed on improving management of the 80 Rural
Sanitary Services (RSSs) in the Choapa province with an integrated
approach as part of a common water basin, with over 50,000 local
residents benefitting. As part of this scheme, 115 RSS operators
were provided with training and 80 tablets were distributed to
assist with data collection and management, covering 95% of systems
in the programme.
Diversity and inclusion
The Company has three key focus
areas in diversity and inclusion (D&I), noting the importance
of D&I in fostering an engaged and effective workforce. These
focus areas cover the development of: (1) gender diversity - aiming
to foster balanced, bias-free teams where talents are made visible;
(2) people with disabilities, creating working environments that
provide equal opportunities for all; and (3) global profiles and
interculturality, with inclusive environments regardless of origin,
ethnicity, and nationality.
In respect of gender diversity,
the Company has continued to improve its gender balance within its
workforce, achieving a level of 23.6% of its employee workforce
being female in 2023 (2022: 20.4%), with over 350 women hired into
a range of roles during the year. The Company has set a gender
diversity goal at 30% by 2025.
Efforts to progress the gender mix
in the Company's workforce are centred on mentoring programmes,
training to attract women into leadership roles and workshops to
promote respectful environments. Furthermore, the Company's efforts
to increase gender balance are not limited to its workforce, with
45% of the positions on the Board of Directors held by women as of
the end of January 2024.
In 2023, people with disabilities
accounted for more than 1% of employees, which exceeds the
government mandated minimum level of 1% under Chile's Workplace
Inclusion Law. As part of our efforts to promote respectful
environments, we hosted 1,500 participants at internal workshops on
respectful and inclusive work environments and practices during
2023.
Emission targets
Through innovation, planning and
resilience, the Company is transforming its production processes
and managing risks associated with climate change and have
proactively adopted measures to mitigate the carbon footprint of
its operations. Having successfully achieved the Company's targeted
emissions reduction in 2022, delivering a reduction of more than
30% in a single year[8], efforts in 2023 centred on publishing an inaugural
assessment of Scope 3 emissions and updating the Company's detailed
decarbonisation pathway, and as a result of this work, the Company
was able to publish its updated emissions targets in early
2024.
Following the publication of Scope
3 emissions as part of the Company's Second Climate Change Report
in 2023, which is available on the Company's website
(www.antofagasta.co.uk)
new emissions reduction targets have been set. A 50% reduction in
the absolute amount of Scope 1 and 2 emissions (combined basis) by
2035 has been set against a baseline year of 2020, which
incorporates modelling of the Company's planned expansion in
production during this time. A Scope 3 target has been set at a 10%
reduction in emissions by 2030 on a projected basis, which the
Company aims to achieve through a focus on active engagement with
its suppliers, since purchases of goods and services remains the
most significant single category of Scope 3 emissions (representing
more than 50% in 2023).
The Company has developed a
decarbonisation strategy that details the diverse range of
activities being tested and deployed to reduce the Company's
emissions footprint, with a key focus on reducing diesel
consumption in the Company's fleet of haul trucks (representing
approximately 60% of Scope 1 emissions). Scope 2 emissions have
already been materially reduced from the baseline year of 2020
following agreements for renewable power supply to all of the
Company's mining operations.
Finally, the Company maintains its
long-term emissions target of achieving carbon neutral production
by 2050, with the recently announced medium-term targets
representing key milestones in progressing towards this
goal.
Water
Managing water consumption has
long been at the forefront of the Company's strategy. Three of the
Company's four mining operations are in the Antofagasta Region of
northern Chile, where the Atacama Desert is located. The fourth,
Los Pelambres, is in an area that has been suffering a severe
drought for the past 14 years, which, according to various climate
scenarios, is expected to continue. Consistent with our Climate
Change Strategy, our operations are reducing their dependence on
continental water sources through improved water use efficiency and
the increased use of sea water as an overall proportion of our
water consumption.
Centinela stopped extracting
continental water in 2022 and, on completion of the planned
expansion of the desalination plant at Los Pelambres, the Company
expects that seawater and recirculated water will account for over
90% of the Mining Division's operational water use.
Considering the ongoing drought in
central Chile and the recent legislative changes in Chile to the
Water Code, discussions have continued during the year with
stakeholders in the Choapa Valley about water distribution
arrangements in the area, following an agreement being reached with
local communities in 2023. The relevant water authority has
continued in the process of reviewing this proposal. This ongoing
process involves no material change to the availability of
continental water at Los Pelambres.
In June 2023, Zaldívar submitted
an EIA application to extend its mining and water environmental
permits through to 2051. This includes a proposal to develop the
primary sulphide ore deposit and extend the current life of mine at
an estimated investment over the mine life of $1.2 billion. It also
includes a plan to change the mine's water source from the local
aquifer to either seawater or water provided by third parties. This
is proposed to follow a transition period during which the current
continental water extraction permit is extended from 2025 to
2028.
In early 2024, approval was
received from the authorities for the separate DIA (Declaration of
Environmental Impact) to extend the mining
permit and, therefore, align the water and mining permits at
Zaldívar. This approval ensures that this operation has rights to
mine ore and extract water until 2025. The mine life after 2025 is,
therefore, subject to the approval of the EIA.
As previously reported, the
Company (as well as other named defendants) submitted a response
contradicting the allegations made by the Consejo de Defensa del
Estado (CDE), an independent governmental agency that represents
the interests of the Chilean state, who previously filed a claim
against Minera Escondida, Albemarle and Zaldívar, alleging that
their extraction of water from the Monturaqui-Negrillar-Tilopozo
aquifer over the years has impacted the underground water level.
The litigation remains outstanding, and the relevant parties are
continuing discussions regarding a potential settlement.
PRODUCTION AND CASH COSTS (AS
PREVIOUSLY ANNOUNCED)
Group copper production for the
full year was 660,600 tonnes, 2% higher than the previous year,
with an increasing contribution from Los Pelambres, as the Phase 1
Expansion Project ramps up.
Gold production for the full year
2023 was 209,100 ounces, 18% higher than 2022 due to higher gold
grades at Centinela.
Molybdenum production for the full
year 2023 was 11,000 tonnes, representing a 13% increase
year-on-year due to higher throughput rates at Los Pelambres and
higher recoveries at Centinela.
The Transport division transported
a record 7.1 million tonnes during 2023, marginally ahead of the
record set in 2022.
Cash costs before by-product
credits in full year 2023 were $2.31/lb, 5% higher than the prior
year, primarily due to local inflation, appreciation of the Chilean
peso and the conclusion of several 3-year labour agreements. Net
cash costs for the full year 2023 were $1.61/lb, in line with 2022
and ahead of guidance for the year, reflecting a balance of higher
underlying cash costs before by-products, alongside higher
production and pricing for by-products.
COST AND COMPETITIVENESS PROGRAMME
The Group's Cost and
Competitiveness Programme achieved more than double its target of
$42 million, yielding benefits of $135 million. This total
comprised $107 million from cost savings, and $28 million from
productivity improvements. The Cost and Competitiveness Programme
in 2023 included initiatives to reduce cash expenditures through
optimising and negotiating third party services, as well as
increasing productivity in terms of greater throughputs and
recoveries.
The target for the Cost and
Competitiveness Programme in 2024 has been set at $200 million,
which would contribute significantly to the Company delivering in
line net cash costs on a year-on-year basis.
EXPLORATION AND EVALUATION
COSTS
Exploration and evaluation costs
increased by $28 million to $141 million, with this increase
reflecting geotechnical drilling at Centinela and evaluation work
at Los Pelambres. Overall expenditures across the Company's
exploration projects remained in line year-on-year.
NET FINANCE EXPENSE
Net finance income (before
exceptional items) for the year was $29 million compared with a net
finance expense of $68 million in 2022, primarily related to
increased interest rates on cash balances and a negative impact in
2022 related to foreign exchange.
TAXATION
The effective tax rate for the
period was 34.7% before exceptional items and 33.9% after
exceptional items, which compares with 37.4% and 23.6% respectively
in 2022.
The income tax expense for the
year excluding exceptional items was $624 million, an increase of
3% as a result of higher profits before tax. Income tax paid during
the year was $528 million compared with $787 million in
2022.
EXCEPTIONAL ITEMS
The Group has recognised an
exceptional fair value gain of $167.1 million (post-tax impact of
$125.3 million) in respect of an agreement under which it is
expected to acquire up to an additional 30 million shares in
Compañia de Minas Buenaventura S.A.A.
In 2022, the Group recognised an
exceptional gain of $944.7 million in respect of its disposal of
its interest in the Reko Diq project in Pakistan.
CAPITAL EXPENDITURE AND
DEPRECIATION & AMORTISATION
Total capital expenditure in 2023
was $2,129 million (2022: $1,879 million), including $756 million
of sustaining capital expenditure, $793 million of mine development
activities and $581 million of growth expenditure. This overall
increase of $250 million principally reflects additional mine
development and sustaining capital expenditures at Centinela, in
addition to growth investments at Antucoya. Further information is
included in the Review of Operations below.
Depreciation, amortisation and
loss on disposals increased by $70 million to $1.21 billion (2022:
$1.14 billion).
NET DEBT
Net debt at the end of the period
was $1,160 million (2022: $886 million), reflecting an increase of
$802 million in total borrowings and a $528 million increase in
total cash balances and liquid investment balances.
The Company maintains a prudent
balance sheet and the Net Debt to EBITDA ratio at the end of the
year was 0.38x (2022: 0.30x). Cash flow from operations in 2023
increased by 11% to $3,027 million (2022: $2,738
million).
DIVIDENDS
The Board has recommended a final
dividend for 2023 of 24.3 cents per share, to be approved by
shareholders at the AGM which, together with the interim dividend
of 11.7 cents per share, amounts to a total dividend of 36.0 cents
per share. This is equal to a 50% pay-out ratio of underlying net
earnings and is consistent with the Company's dividend
policy.
MINING ROYALTY IN
CHILE
In May 2023, both the Chilean
Senate and lower house of Congress approved the proposed revision
to Chile's mining royalty bill, with Presidential approval
confirmed in August 2023. The terms include a 1% ad valorem royalty
on copper sales, and a royalty ranging from 8% to 26% on operating
profits depending on each mining operation's level of
profitability, combined with a provision establishing that total
taxation (including corporate income, the new royalty tax and tax
on dividends) should not exceed 46.5% of profitability. This new
law will come into effect at the beginning of 2024. Since Centinela
and Antucoya have tax stability agreements, the new royalty rates
will only apply at these operations from 2030. As a result of the
approval of the new mining royalty, a one-off adjustment has been
recognized to the deferred tax balances of the Group's mining
operations, resulting in an increase in the deferred tax liability
balance of $34.3 million, with a corresponding deferred tax
expense.
CHILEAN CONSTITUTIONAL
CONVENTION
In December 2023, Chileans voted
to reject a proposed constitution and, as a result, the country
will now continue with the existing constitution, which has been in
place for several decades.
MINERAL RESOURCES
The Group's total mineral
resources increased by 345 million tonnes during 2023 to 21.0
billion tonnes, containing approximately 14.3 billion tonnes on an
attributable basis.
CUPROCHLOR-T®
The Company continues to progress
test work on its patented Cuprochlor-T® technology for the leaching
of primary sulphides, which has now achieved recovery rates of more
than 70% after 220 days. The Company is now evaluating the
feasibility of advancing this technology across other mining
operations, including third parties.
REKO DIQ PROJECT
Funds relating to the sale of the
Company's interest in the Reko Diq project in Pakistan were
received in 2023, amounting to $945 million. This follows the
recognition of an exceptional gain in the 2022 accounts relating to
the agreement signed to sell the Company's interest in Reko Diq
during that year.
INVESTMENTS
The Company announced in December
2023 that it had entered into transactions in the secondary market
to acquire beneficial ownership of approximately 19% of the
outstanding shares of Compañía de Minas Buenaventura S.A.A.
(Buenaventura). Buenaventura is Peru's largest, publicly traded
precious and base metals company and a major holder of mining
rights in Peru. This investment is in line with the Company's
strategy of prioritising exploration and investment in the
Americas. The Company currently holds 18.2 million shares of
Buenaventura, representing the equivalent of approximately 7% of
Buenaventura's issued share capital, and has an agreement in place
to acquire up to an additional 30 million shares, representing
approximately an additional 12% of Buenaventura's issued share
capital. Further information is provided in Note 3 of the Accounts.
FUTURE GROWTH
The Group has a pipeline of growth
projects to develop its significant mineral resource base which it
is currently advancing through a disciplined process of project
evaluation.
The Company announced in late 2023
that the Centinela Second Concentrator had received approval and
full construction will commence following the execution of
definitive finance documents, which is expected to take place in Q1
2024. The Centinela Second Concentrator is a brownfields expansion
that will add an additional 170,000 tonnes of copper-equivalent
production[9] and will
move the Centinela District towards the first quartile on the
global cost curve.
In addition, the Company continues
to advance studies into the next phase of growth at Los Pelambres,
and further details of this project and the wider pipeline of
projects are provided on page 15 of this report.
COPPER MARKET
Following market tightness in
early 2023, when copper prices rose by 12% in January to a peak of
$4.23 per pound, prices gradually trended down to $3.80/lb as of
the end of the year. This downwards trend was largely seen in H1
2023. A degree of stability was seen in H2 2023, with more than 50%
of the daily closing prices seen in H2 2023 sitting between
$3.60/lb and $3.80/lb.
Over the course of the year, the
average market copper price was 4% lower year-on-year at $3.85/lb,
with a minimum price of $3.55/lb (2022 minimum: $3.25/lb) and a
maximum price of $4.23/lb (2022 maximum: $4.85/lb).
Prices in 2023 reflected a
significantly lower level of volatility than in 2022. Whilst
macro-economic factors saw a decline in global demand during 2023,
supply-side disruption and guidance cuts have helped to balance the
market.
Copper prices in 2024 will depend
on a range of factors, including growth rates in the Chinese
economy, in particular the continued stabilisation of the property
sector, as well as the outlook for recently disrupted mine supply
and global copper inventories.
2024 GUIDANCE
(as previously announced)
Group production in 2024 is
expected to be 670-710,000 tonnes of copper. Output of by-products
is expected to be 195-215,000 ounces of gold and 11-12,500 tonnes
of molybdenum. The expected increase in copper production in 2024
principally reflects the addition of the Los Pelambres Phase 1
Expansion Project in 2023, with increased water availability and
ore processing capacity expected in 2024.
Group cash costs in 2024 before
by-product credits are expected to be $2.25/lb, in line with 2023,
with the positive impact of higher production balanced by a
short-term reduction in ore grades at Los Pelambres.
Group net cash costs in 2024 are
expected to be $1.60/lb, with by-product credits expected to remain
in line year-on-year.
In 2024, consolidated Group
capital expenditure, which excludes Zaldívar, is expected to be
$2.7 billion, with sustaining and mine development expenditure
broadly in line year-on-year, and as development expenditure
commences on the Centinela Second Concentrator and other growth
projects at Los Pelambres and Centinela. Forecast capital expenditure in respect of the Centinela
Second Concentrator does not include any potential reduction in
capital expenditure as a result of the process to outsource
Centinela's water supply.
REVIEW OF OPERATIONS
LOS PELAMBRES
2023 Performance
Operating
performance
Production at Los Pelambres
increased in 2023 as a result of increased water availability
following the completion of construction of the Company's
desalination plant during the year, and subsequent ramp
up.
EBITDA was $1,725 million,
compared with $1,473 million in 2022, reflecting higher production
and sales volumes, and higher realised prices for copper and
by-products.
Production
Copper production for 2023 was
300,300 tonnes, 9% higher than the prior year. This was driven by
increased throughput rates in 2023, which resulted from increasing
availability of water from the Company's desalination plant as it
successfully progresses its ramp up, and additional ore processing
capacity provided by the fourth concentrator line. Molybdenum
production in 2023 was 8,100 tonnes, representing a 13% increase
year-on-year, which was the result of higher throughput rates. Gold
production in 2023 rose by 0.5%, reflecting a balance of lower gold
grades and higher ore processing rates.
Costs
For the full year, cash costs
before by-product credits were $1.92/lb, 4% higher than in 2022.
The key drivers behind this increase in 2023 are appreciation of
the Chilean peso, local inflation, and the conclusion of 3-year
labour agreements, partially offset by higher production and lower
input costs.
Net cash costs were $1.14/lb for
the full year, 4% higher than in 2022, reflecting a similar
increase in the underlying cash costs and higher production and
pricing for molybdenum.
Capital
expenditure
Capital expenditure was $897
million, including $193 million of mine development, $361 million
of sustaining capital expenditure and $344 million of development
capital expenditure.
Outlook for 2024
The forecast production for 2024
is 335-350,000 tonnes of copper, 8,500-9,500 tonnes of molybdenum
and 45-55,000 ounces of gold. Higher production is expected due to
higher throughput, with increased water availability and ore
processing capacity with the Los Pelambres Phase 1 Expansion
ramping up.
Cash costs before by-product
credits are forecast to be approximately $2.05/lb and net cash
costs $1.35/lb, reflecting higher production, offset by lower
expected grades.
CENTINELA
2023 Performance
Operating
performance
Ore throughput remained consistent
in 2023 with levels seen in the previous year, with operations
maintaining a strong level of operational performance in line with
the plant's design capacity for the entire year. Higher production
at Centinela Concentrates, driven by improved ore grade, was
counterbalanced by lower ore grades at Centinela
Cathodes.
EBITDA at Centinela was $1,219
million in 2023, compared with $1,157 million in 2022, on higher
copper, molybdenum and gold sales volumes and higher molybdenum and
gold realised prices partially offset by higher unit
costs.
Production
In 2023, copper production was
242,000 tonnes, 2% lower than last year. This reduction in output
reflects lower ore grades at Centinela Cathodes, which was
partially offset by higher ore grades at Centinela
Concentrates.
Production of copper in
concentrate was 162,700 tonnes, 9% higher than in 2022, reflecting
a combination of higher ore grades and copper recoveries, with the
concentrator operating in line with its design capacity. Copper
cathode production was 79,300 tonnes, 19% lower than in 2022 due to
lower copper grades, offset by higher throughput rates. Gold
production during the year was 165,800 ounces, 24% higher than in
2022 due to higher gold grades (which are positively correlated to
copper grades). Molybdenum production in 2023 reached 2,900 tonnes
- a record for Centinela, with this year-on-year increase of 21%
reflecting higher molybdenum recoveries during the year.
Costs
Cash costs before by-product
credits in 2023 were $2.57/lb, 5.3% higher than in 2022 due to
lower copper production, the conclusion of 3-year labour agreements
and higher contractor costs related to mining.
By-product credits were $0.94/lb,
25c/lb higher than in 2022 due to higher production and pricing of
both gold and molybdenum.
During the full year, net cash
costs were $1.63/lb, 12c/lb lower than 2022 due to higher
by-product credits.
Capital
expenditure
Capital expenditure was $1,041
million, including $569 million of mine development, $306 million
of sustaining capital expenditure and $166 million of development
capital expenditure.
Outlook for 2024
Production is forecast at
225-240,000 tonnes of copper, 150-160,000 ounces of gold and
2.5-3,000 tonnes of molybdenum. Copper production is expected to
decrease compared with 2023 as a result of lower grades
at Centinela Concentrates during the year.
Cash costs before by-product
credits are forecast to be approximately $2.30/lb and net cash
costs of $1.45/lb.
ANTUCOYA
2023 Performance
Operating
performance
Antucoya continues to operate in
line with its design throughput, sustaining the consistent
performance and improved reliability that was achieved in the
previous period.
EBITDA was $215 million in 2023,
compared with $261 million in 2022, reflecting higher operating
costs and the lower realised copper price.
Production
Production for the full year was
77,800 tonnes, 1.8% lower than last year due to a combination of
marginally lower ore grades and recoveries.
Costs
Costs during the full year were 5%
higher at $2.63/lb, reflecting local inflation, appreciation of the
Chilean peso, higher consumption rates of sulphuric acid in line
with expectations, with lower input costs serving to partially
offset these effects.
Capital
expenditure
Capital expenditure was $122
million, including $88 million on sustaining capital
expenditure.
Outlook for 2024
Production is forecast to be
75-80,000 tonnes of copper and cash costs are expected to be
approximately $2.50/lb.
ZALDÍVAR
2023 Performance
Operating
performance
During the year, a range of
operational initiatives continued to be implemented, in light of
the operational challenges faced in 2022, with an improvement in
copper recoveries seen during 2023 as a result. The Company's
operating teams are implementing an operational improvement
programme aimed at increasing productivity and throughput rates at
Zaldívar, given throughput levels were
lower than expected in 2023, which are
expected to lower cash costs over time.
Attributable EBITDA was $87
million compared with $147 million in 2022.
Production
Attributable copper production for
the year was 40,500 tonnes, 9% lower than in 2022 mainly due to
lower ore processing rates, which were partially mitigated by
improved recoveries during the year.
Costs
Cash costs for the full year were
$2.95/lb, 23% higher than the previous year's costs due to lower
production, local inflation, increased costs for maintenance and
utilisation of stocks from the prior period.
Capital
expenditure
Attributable capital expenditure
in 2023 was $46 million, of which $34 million was sustaining
capital expenditure.
Outlook for 2024
Attributable copper production is
forecast to be 35-40,000 tonnes at a cash cost of approximately
$2.95/lb.
TRANSPORT DIVISION
2023 Performance
Operating
performance
The Transportation Division has
continued to refine its operational activities through the
implementation of its management model, based on five fundamental
pillars: operational excellence, growth, transformation, community,
and urban development.
Total transportation volumes in
2023 remained consistent with those of 2022, with the 7.1 million
tonnes of transported material marginally ahead of the record set
in 2022. EBITDA reached $81.5 million, a 2% increase versus 2022,
primarily due to improvements in the pricing of some
contracts.
Costs
The division has implemented
various operational efficiency improvements, optimising costs to
ensure long-term competitiveness with a continuation of the
Transport Division's Cost and Competitiveness Programme. Through
this, achieving significant improvements in cost structure, revenue
flow, and operational standards were achieved, with cumulative
benefits of approximately $6.6 million over the year.
Outlook for 2024
In 2024, the division intends to
maintain progress made in 2023, when a number of contracts were
either awarded or renewed. Looking ahead, the division has a robust
portfolio of projects that we expect will facilitate an increase in
bulk material transportation volumes.
Concurrently, the division
continues to advance its strategy to transform its lands, located
in the centre of Antofagasta city, from industrial to urban use.
Remediation works began at the end of 2023, marking a significant
milestone in this development process. Another important milestone
for 2024 is the arrival of the first hydrogen locomotive, which
will allow for a reduction in CO2 emissions in the
coming years.
GROWTH PROJECTS AND
OPPORTUNITIES
Los Pelambres Expansion
Phase 1
This phase of work was designed to
optimise throughput within the limits of the existing operating,
environmental and water extraction permits.
As mining progresses at Los
Pelambres, ore hardness will increase. The expansion aims to
compensate for this, increasing plant throughput from its current
capacity of 175,000 tonnes of ore per day to an average of 190,000
tonnes of ore per day. The Phase 1 Expansion was divided into two
sub-projects: the construction of a desalination plant and water
pipeline from the coast to the El Mauro tailings storage facility,
and the expansion of the concentrator plant, which includes the
installation of an additional SAG mill and ball mill and six
additional flotation cells.
As of the end of 2023, the
desalination plant and the water pipeline continued to successfully
ramp up, with four million cubic metres delivered to the Company's
operations at Los Pelambres. At the processing plant, mechanical
completion of the concentrator plant expansion was successfully
achieved in October 2023. As at year end, commissioning work is
underway with results being consistently ahead of schedule and with
two million tonnes of additional material processed.
Desalination plant
expansion
The desalination plant expansion
to 800l/s, which is part of the Los Pelambres water strategy,
required a separate Environmental Impact Assessment (EIA).
This project is designed to
protect Los Pelambres from the future impact of climate change and
the deteriorating availability of water in the region. The project
includes the expansion of the desalination plant and the
construction of a new water pipeline from the El Mauro tailings
storage facility to the concentrator plant. The project cost will
be reported as part of the Group's sustaining capital expenditure. This project
will start construction in early 2024, with the schedule envisaging
completion of construction in 2027.
In 2021, Los Pelambres submitted
the EIA required for this project, which includes the desalination
plant expansion and two other sustaining capital infrastructure
projects:
(1) The replacement of the
concentrate pipeline. The new pipeline will follow the route taken
by the existing water pipeline from the desalination plant to the
mine. This revised route for the concentrate pipeline will avoid
interactions with communities along the Choapa valley and is
planned to be in operation from 2027; and
(2) Construction of certain
planned enclosures at the El Mauro tailings storage
facility.
The Company received approval of
the EIA for the above projects in late 2023.
The sustaining capital
infrastructure projects indicated above will commence construction
in 2024, which will provide a platform for the Phase 2 projects
that are outlined below.
Phase 2 - Mine life
extension
The current mine life of Los
Pelambres is limited by the capacity of the El Mauro tailings
storage facility, with sufficient storage capacity for a further 12
years. This project will require an EIA, with a scope that will
include increasing the capacity of the El Mauro tailings storage
facility, additional storage capacity for mine waste at Los
Pelambres and any water requirement for the enlarged capacity of
this operation. This will extend the mine's life by a minimum of 15
additional years, accessing a larger portion of Los Pelambres' six
billion tonnes of mineral resources. This EIA will also provide for
the option to increase throughput to 205,000 tonnes of ore per day
(from the current capacity of 190,000 tonnes of ore per
day).
Key studies on tailings and waste
storage capacity have advanced and community consultation is under
way. The environmental and social studies associated with this
project are being prepared, including the voluntary public
consultation with communities and informative engagement with key
authorities, which should be submitted to evaluation by the
relevant authorities in Chile during 2024 as part of the EIA
application.
Centinela Second
Concentrator
After an extensive review,
approval of the construction of the Centinela Second Concentrator
Project was announced at the end of 2023. Following announcement,
critical path works began immediately, with full construction
expected to commence after the execution of definitive project
finance documents during Q1 2024.
The project includes the
construction of a second concentrator and tailings deposit,
approximately 7 km from the existing concentrator, to take place in
two phases. The EIA for both phases was approved by the authorities
in 2016. Detailed engineering plans and costings were updated for
Phase 1 of the project and key contracts finalised.
Following Phase 1, the capacity of
the new concentrator will be 95,000 tonnes of ore per day,
producing on average approximately 170,000 tonnes of copper
equivalent (copper, gold and molybdenum) a year over the first ten
years of operation. This is expected to move Centinela towards the
first cost quartile of global producers.
The Phase 1 capital cost is $4.4
billion, including the cost of the new water supply system. The
phasing of the project's capital expenditure is expected to be
weighted towards 2025, with similar expenditures in adjacent years.
The estimate includes a concentrator plant, capitalised stripping,
mining equipment, a new tailings storage facility, a water pipeline
and other infrastructure, pre-commercial production operating
costs, and owner's and other costs.
Phase 2 is an optional growth step
and the feasibility of this phase will be evaluated in the future,
once Phase 1 is operating successfully.
The second concentrator will
source ore initially from the recently opened Esperanza Sur pit and
later also from the Encuentro pit. The sulphide ore in the
Encuentro pit lies under the Encuentro Oxides reserves. Fully
exposing the sulphide ore in the optimal sequence required to
initiate feed to the second concentrator from the Encuentro Pit is
expected to require separate investments in infrastructure, mining
equipment and mine development activities, which will materially
commence half-way through the construction phase of the second
concentrator and will span a period of 3-4 years. As announced in
December 2023, the combined investment in mine development and
sustaining capital for the expansion of the Encuentro pit is
estimated to be approximately $1 billion. This expansion in mining
activities will further enable Centinela to achieve the development
potential of its extensive mineral resource base.
Detailed terms and conditions have
been substantially completed for the option to provide water for
Centinela's current and future operations, with a third party
potentially acquiring the existing water supply system and building
the new water pipeline expansion. The planned outsourcing of the
water supply will only proceed if it improves the net present value
of the project, with the decision on this process scheduled
alongside the execution of definitive project finance documents
during Q1 2024.
Twin Metals Minnesota
Twin Metals Minnesota (Twin
Metals) is a wholly owned copper, nickel, and platinum group metals
(PGM) underground mining project, which holds copper,
nickel/cobalt, and PGM deposits in north-eastern Minnesota, United
States (US). The planned project is over a portion of the total
resource and envisages mining and processing 18,000 tonnes of ore
per day for 25 years to produce three separate concentrates -
copper, nickel/cobalt and PGM. However, further development of the
current project, as configured, is on hold whilst litigation takes
place to challenge several actions taken by the US federal
government to deter its development.
In 2022, Twin Metals filed a
lawsuit in the US District Court for the District of Columbia
(District Court) challenging the administrative actions resulting
in the rejection of Twin Metals' preference right lease
applications (PRLAs), the cancellation of its federal mining leases
1352 and 1353, the rejection of its Mine Plan of Operation (MPO),
and the dismissal of the administrative appeal of the MPO
rejection. Twin Metals claimed that the government's actions were
arbitrary and capricious, contrary to the law, and in violation of
its rights. In September 2023, following a motion to dismiss filed
by the government, the District Court dismissed Twin Metals'
claims. In November 2023, Twin Metals appealed the District Court's
order to the US Court of Appeals for the District of Columbia
Circuit. This action is pending.
FINANCIAL REVIEW FOR THE YEAR ENDED 31 DECEMBER
2023
|
|
|
|
Year ended
31.12.2023
(Unaudited)
|
|
|
Year
ended
31.12.2022
(Audited)
|
|
|
Before exceptional
items
|
Exceptional
items
|
Total
|
Before
exceptional items
|
Exceptional
Items
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Revenue
|
6,324.5
|
-
|
6,324.5
|
5,862.0
|
-
|
5,862.0
|
|
EBITDA (including share of EBITDA
from associates and joint ventures)[10]
|
3,087.2
|
-
|
3,087.2
|
2,929.7
|
-
|
2,929.7
|
|
Total operating costs
|
(4,541.7)
|
-
|
(4,541.7)
|
(4,227.7)
|
-
|
(4,227.7)
|
|
Operating profit from subsidiaries
|
1,782.8
|
-
|
1,782.8
|
1,634.3
|
-
|
1,634.3
|
|
Net share of results from associates
and joint ventures
|
(13.5)
|
-
|
(13.5)
|
48.1
|
-
|
48.1
|
|
Gain on disposal of investment in
joint venture
|
-
|
-
|
-
|
-
|
944.7
|
944.7
|
|
Operating profit from subsidiaries, and share of total
results from associates and joint ventures
|
1,769.3
|
-
|
1,769.3
|
1,682.4
|
944.7
|
2,627.1
|
|
Net finance income /
(expense)
|
29.1
|
167.1
|
196.2
|
(68.2)
|
-
|
(68.2)
|
|
Profit before tax
|
1,798.4
|
167.1
|
1,965.5
|
1,614.2
|
944.7
|
2,558.9
|
|
Income tax expense
|
(624.3)
|
(41.8)
|
(666.1)
|
(603.6)
|
-
|
(603.6)
|
|
Profit from continuing operations
|
1,174.1
|
125.3
|
1,299.4
|
1,010.6
|
944.7
|
1,955.3
|
|
Profit for the year
|
1,174.1
|
125.3
|
1,299.4
|
1,010.6
|
944.7
|
1,955.3
|
|
Attributable to:
|
|
|
|
|
|
|
|
Non-controlling interests
|
464.3
|
-
|
464.3
|
422.3
|
-
|
422.3
|
|
Profit attributable to the owners of the
parent
|
709.8
|
125.3
|
835.1
|
588.3
|
944.7
|
1,533.0
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
Cents
|
Cents
|
Cents
|
Cents
|
cents
|
Cents
|
|
From continuing
operations
|
72.0
|
12.7
|
84.7
|
59.7
|
95.8
|
155.5
|
The profit for the financial year
attributable to the owners of the parent (including exceptional
items) decreased from $1,533.0 million in 2022 to $835.1 million in
the current year. Excluding exceptional items, the profit
attributable to the owners of the parent increased by $121.5
million to $709.8 million.
The full reconciliation
of the profit attributable to the owners of the
parent between 2022 and 2023, including
exceptional items, is as follows:
|
|
$m
|
|
|
|
|
Profit attributable to the owners of the parent in
2022
|
1,533.0
|
|
Less: exceptional items -
2022
|
(944.7)
|
|
Profit attributable to the owners of the parent in 2022
(excluding exceptional items)
|
588.3
|
|
|
|
|
Increase in revenue
|
462.5
|
|
Increase in total operating
costs
|
(314.0)
|
|
Decrease in net share of
results from associates and joint ventures
(excluding exceptional items)
|
(61.6)
|
|
Decrease in net finance expenses
(excluding exceptional items)
|
97.3
|
|
Increase in income tax expense
(excluding exceptional items)
|
(20.7)
|
|
Increase in non-controlling
interests
|
(42.0)
|
|
|
121.5
|
|
|
|
|
Profit attributable to the owners of the parent in 2023
(excluding exceptional items)
|
709.8
|
|
Exceptional items - 2023 (post
tax)
|
125.3
|
|
Profit attributable to the owners of the parent in
2023
|
835.1
|
Revenue
The $462.5 million increase in
revenue from $5,862.0 million in 2022 to $6,324.5 million in the
current year reflected the following factors:
|
|
$m
|
|
|
|
|
Revenue in 2022
|
5,862.0
|
|
|
|
|
Increase in copper sales
volumes
|
230.8
|
|
Increase in realised copper
price
|
69.0
|
|
Increase in treatment and refining
charges
|
(57.8)
|
|
Increase in gold revenue
|
93.1
|
|
Increase in molybdenum
revenue
|
112.0
|
|
Increase in silver
revenue
|
12.9
|
|
Increase in Transport division
revenue
|
2.5
|
|
|
462.5
|
|
|
|
|
Revenue in 2023
|
6,324.5
|
Revenue from the Mining division
Revenue from the Mining division
increased by $460.0 million, or 8%, to $6,128.6 million, compared
with $5,668.6 million in 2022. The increase reflected a $242.0
million increase in copper sales and a $218.0 million increase in
by-product revenue.
Revenue from copper sales
Revenue from copper concentrate
and copper cathode sales increased by $242.0 million, or 5%, to
$5,147.4 million, compared with $4,905.4 million in 2022.
The increase reflected the impact of
$230.8 million from
higher sales volumes and $69.0 million
from higher realised prices, partly offset
by $57.8 million due to the impact of higher
treatment and refining charges on the
prices invoiced.
(i) Copper volumes
Copper sales volumes reflected
within revenue increased by 4.5% from 598,100 tonnes in 2022 to
625,300 tonnes in 2023, increasing revenue by $230.8
million. This increase was due to higher
copper sales volumes at Los Pelambres (27,800 tonnes increase),
reflecting higher throughput in the current year, which resulted
from increasing availability of water from the operation's
desalination plant as it successfully completes its ramp up, and
additional ore processing capacity provided by the fourth
concentrator line that is nearing the end of its commissioning
phase.
(ii) Realised copper price
The average realised copper price
increased by 1.3% to $3.89/lb in 2023 (2022 - $3.84/lb), resulting
in a $69.0 million increase in revenue. The LME average market price decreased by 3.8% to $3.85/lb in 2023 (2022 - $4.00/lb).
In 2023, there was a $81.3 million positive
impact from provisional pricing adjustments, mainly as a result of
a positive net impact in the settlement of sales invoiced and by
the increase in the period end mark to market price to $3.87/lb at
31 December 2023, compared with $3.80/lb at 31 December 2022.
Conversely there had been a $169.7 million negative impact from
provisional pricing adjustments in 2022, which mainly reflected the
decrease in the year-end mark-to-market copper price to $3.80/lb at
31 December 2022, compared with $4.42/lb at 31 December
2021.
Realised copper prices are
determined by comparing revenue (after adding back treatment and
refining charges for concentrate sales) with sales volumes in the
period. Realised copper prices differ from market prices mainly
because, in line with industry practice, concentrate and cathode
sales agreements generally provide for provisional pricing at the
time of shipment with final pricing based on the average market
price in future periods (normally around one month after delivery
to the customer in the case of cathode sales and four months after
delivery to the customer in the case of concentrate
sales).
Further details of provisional
pricing adjustments are given in Note 6 to the Full-year results
announcement.
(iii) Treatment and refining charges
Treatment and refining charges
(TC/RCs) for copper concentrate increased by $57.8 million to
$213.6 million in 2023, compared with $155.8 million in 2022
reflecting higher average TC/RC rates and the increase in
concentrate sales volumes mainly at Los Pelambres.
With sales of concentrates at Los
Pelambres and Centinela, which are sold to smelters and roasting
plants for further processing into fully refined metal, the price
of the concentrate invoiced to the customer reflects the market
value of the fully refined metal less a "treatment and refining
charge" deduction, to reflect the lower value of this partially
processed material compared with the fully refined metal. For
accounting purposes, the revenue amount reflects the invoiced price
(which reflects the net of the market value of fully refined metal
less the treatment and refining charges). However, under the
standard industry definition of unit cash costs, treatment and
refining charges are regarded as part of cash costs.
Accordingly, the increase in these
charges has had a negative impact on revenue in the
year.
Revenue from molybdenum, gold and other by-product
sales
Revenue from by-product sales at
Los Pelambres and Centinela relate mainly to molybdenum and gold
and, to a lesser extent, silver. Revenue from by-products increased
by $218.0 million or 28.6% to $981.2 million in 2023, compared with
$763.2 million in 2022. This increase was
mainly due to the higher molybdenum and gold sales volumes and realised
prices.
Revenue from molybdenum sales (net
of roasting charges) was $504.2 million (2022 - $392.2 million), an
increase of $112.0 million. The increase was due to both the higher
sales volumes of 11,100 tonnes (2022 - 9,200 tonnes) reflecting the
higher production volumes mainly at Los Pelambres, as well as
the 5.8% higher realised price of
$22.0/lb (2022 - $20.8/lb).
Revenue from gold sales (net of
treatment and refining charges) was $406.9 million (2022 - $313.8
million), an increase of $93.1 million which reflected an increase
in volumes and a higher realised price. Gold sales volumes
increased by 17.3% from 174,700 ounces in 2022 to 204,900 ounces in
2023, mainly due to higher gold grades at Centinela. The realised
gold price was $1,989.5/oz in 2023 compared with $1,800.4/oz in
2022, reflecting the average market price for 2023 of $1,943.1/oz
(2022 - $1,800.4/oz) and a positive provisional pricing adjustment
of $9.2 million.
Revenue from silver sales
increased by $12.9 million to $70.1 million (2022 - $57.2
million). The increase was due to higher
sales volumes of 3.0 million ounces (2022
- 2.7 million ounces) and a 13.2% higher
realised silver price of $24.0/oz (2022 -
$21.2/oz).
Revenue from the Transport division
Revenue from the Transport
division (FCAB) increased by $2.5 million or 1.3% to $195.9 million
(2022 - $193.4 million), mainly due to increased pricing in some
contracts.
Total operating
costs
The $314.0 million increase in
total operating costs from $4,227.7 million in 2022 to $4,541.7
million in the current year reflected the following
factors:
|
|
$m
|
|
|
|
|
Total operating costs in 2022 (excluding exceptional
items)
|
4,227.7
|
|
|
|
|
Increase in mine-site operating
costs
|
187.4
|
|
Increase in closure provision and
other mining expenses
|
5.1
|
|
Increase in exploration and
evaluation costs
|
28.1
|
|
Increase in corporate
costs
|
23.7
|
|
Increase in Transport division
operating costs
|
1.6
|
|
Increase in depreciation,
amortisation and loss on disposals
|
68.1
|
|
|
314.0
|
|
|
|
|
Total operating costs in 2023 (excluding exceptional
items)
|
4,541.7
|
Operating costs (excluding depreciation, amortisation and
disposals) at the Mining division
Operating costs (excluding
depreciation, amortisation, loss on disposals and impairments) at
the Mining division increased by $244.3 million to $3,209.7 million
in 2023, an increase of 8.2%.
Of this increase, $187.4 million
was attributable to higher mine-site operating costs, reflecting
higher unit costs and increased sales volumes.
On a unit cost basis, weighted
average cash costs excluding treatment and refining charges and
by-product revenues increased from $2.05/lb in 2022 to $2.14/lb in
2023. As detailed in the alternative performance measures section
on page 65 of the Full-Year Results announcement, for accounting
purposes by-product credits and treatment and refining charges both
impact revenue and don't therefore affect operating expenses. This
increase largely reflected general inflation and the stronger
Chilean peso, partially offset by the cost savings from the Group's
Cost and Competitiveness Programme and lower key input prices and
shipping costs.
The Cost and Competitiveness
Programme was implemented to reduce the Group's cost base and
improve its competitiveness within the industry. During 2023, the
programme achieved benefits of $134.7 million in the Mining
division, of which $106.5 million reflected cost savings and $28.2
million reflected the value of productivity improvements. Of the
$106.5 million of cost savings, $101.2 million related to Los
Pelambres, Centinela and Antucoya, and therefore impacted the
Group's operating costs, and $5.4 million related to Zaldívar (on a
100% basis) and therefore impacted the share of results from
associates and joint ventures.
Closure provisions and other
mining expenses increased by $5.1 million. Exploration and
evaluation costs increased by $28.1 million to $141.1 million (2022
- $113.0 million), principally in respect
of geotechnical drilling at Centinela and evaluation expenditure at
Los Pelambres.
Operating costs (excluding depreciation, amortisation and
loss on disposals) at the Transport division
Operating costs (excluding
depreciation, amortisation and loss on disposals) at the Transport
division increased by $1.6 million to $120.7 million (2022 - $119.1
million), mainly due to general inflation and the stronger Chilean
peso.
Depreciation, amortisation and disposals
The expense for depreciation,
amortisation and loss on disposals increased by $68.1 million from
$1,143.2 million in 2022 to $1,211.3 million. This increase is mainly due to higher depreciation of new
assets at Centinela and Los Pelambres.
Operating profit from subsidiaries
As a result of the above factors,
operating profit from subsidiaries increased by $148.4 million or
9.1% in 2023 to $1,782.8 million (2022 - $1,634.3
million).
Share of results from associates and joint ventures
(excluding exceptional items)
The Group's share of results from
associates and joint ventures (excluding exceptional items)
decreased by $61.6 million to a loss of $13.5 million
in 2023, compared with a profit of $48.1 million
in 2022. Of this decrease, $62.7 million was due to the lower
profit from Zaldívar, reflecting decreased copper sales volumes,
due to lower copper production (reflecting lower ore processing
rates, which were partially mitigated by improved recoveries during
the year), a lower realised copper price and higher cash
costs.
EBITDA
EBITDA (earnings before interest,
tax, depreciation and amortisation, and impairments) increased by
$157.5 million or 5.4% to $3,087.2 million (2022 - $2,929.7
million). EBITDA includes the Group's proportional share of EBITDA
from associates and joint ventures.
EBITDA from the Mining division
increased by $156.0 million or 5.5% from $2,849.7 million in 2022
to $3,005.7 million this year. This reflected the higher revenue,
partially offset by the higher mine-site costs, exploration and
evaluation expenditure, and corporate costs, as well as lower
EBITDA from associates and joint ventures.
EBITDA at the Transport division
increased by $1.5 million to $81.5 million in 2023 ($80.0 million -
2022), reflecting the higher revenue and slightly increased EBITDA
from associates, partly offset by the higher operating
costs.
Commodity price and exchange rate
sensitivities
The following sensitivities show
the estimated approximate impact on EBITDA for 2023 of a 10%
movement in the average copper, molybdenum and gold prices and a
10% movement in the average US dollar / Chilean peso exchange
rate.
The impact of the movement in the
average commodity prices reflects the estimated impact on the
relevant revenues during 2023, and the impact of the movement in
the average exchange rate reflects the estimated impact on Chilean
peso denominated operating costs during the year. These estimates
do not reflect any impact in respect of provisional pricing or
hedging instruments, any potential inter-relationship between
commodity price and exchange rate movements, or any impact from the
retranslation or changes in valuations of assets or liabilities
held on the balance sheet at the year-end.
|
|
Average
market commodity price / average exchange rate during the year
ended 31.12.23
|
Impact
of a 10% movement in the commodity price / exchange rate on
EBITDA
for the year ended 31.12.23
|
|
|
|
$m
|
|
|
|
|
|
Copper price
|
$3.85/lb
|
566
|
|
Molybdenum price
|
$24.1/lb
|
59
|
|
Gold price
|
$1,943/oz
|
40
|
|
US dollar / Chilean peso exchange
rate
|
839
|
161
|
Net
finance income / (expense) (excluding exceptional
items)
Net finance income (excluding
exceptional items) of $29.1 million reflected a variance of $97.3
million compared with the $68.2 million expense in 2022.
|
|
Year
ended 31.12.23
$m
|
Year
ended 31.12.22
$m
|
|
Investment income
|
138.1
|
40.2
|
|
Interest expense
|
(105.6)
|
(78.6)
|
|
Other finance items
|
(3.4)
|
(29.8)
|
|
Net finance
income/(expense)
|
29.1
|
(68.2)
|
Interest income increased from
$40.2 million in 2022 to $138.1 million in 2023,
largely due to an increase in average interest
rates.
Interest expense increased from
$78.6 million in 2022 to $105.6 million in 2023, again
mainly reflecting an increase in average
interest rates and an increase in the average relevant borrowing
balances (after taking account of
borrowings where the interest is capitalised).
Other finance items were a net
loss of $3.4 million, compared with a net loss of $29.8 million in
2022, a variance of $26.4 million. This
was mainly due to the foreign exchange impact of the retranslation
of Chilean peso denominated assets and liabilities, which resulted
in a $12.5 million gain in 2023 compared with a $12.8 million loss
in 2022. In
addition, there was an expense of $15.8 million in respect of the
unwinding of the discounting of provisions (2022 - expense of $16.9
million).
Profit before tax (excluding exceptional
items)
As a result of the factors set out
above, profit before tax (excluding exceptional items) increased by
11.4% to $1,798.4 million (2022 - $1,614.2 million).
Income tax expense
The tax charge for 2023 excluding
exceptional items increased by $20.7 million to $624.3 million
(2022 - $603.6 million) and the effective tax rate for the year was
34.7% (2022 - 37.4%). Including exceptional items, the tax charge
for 2023 was $666.1 million and the effective tax rate was
33.9%.
As a result of the approval of the
new mining royalty during 2023, a one-off adjustment has been
recognized to the deferred tax balances of the Group's mining
operations, resulting in an increase in the deferred tax liability
balance of $34.3 million, with a corresponding deferred tax
expense. Also, the withholding tax charge in the current period
reflected a one-off adjustment to the provision for deferred
withholding tax, as a result of an intra-group restructuring of
intercompany balances, reducing the provision balance by $34.7
million, with a corresponding reduction in the deferred tax
expense. The net impact of these two one-off items was therefore a
reduction in the tax expense of $0.4 million.
|
|
|
Year ended
Excluding exceptional
items
31.12.2023
|
|
Year ended
Including exceptional
items
31.12.2023
|
|
Year
ended
Excluding exceptional items
31.12.2022
|
Year
ended
Including exceptional items
31.12.2022
|
|
|
|
$m
|
%
|
|
$m
|
%
|
|
$m
|
%
|
$m
|
%
|
|
|
Profit before tax
|
|
1,798.4
|
|
|
1,965.5
|
|
|
1,614.2
|
|
2,558.9
|
|
|
Profit before tax multiplied by
Chilean corporate tax rate of 27%
|
|
(485.6)
|
27.0
|
|
(530.7)
|
27.0
|
|
(435.9)
|
27.0
|
(691.0)
|
27.0
|
|
Mining Tax (royalty)
|
|
(109.7)
|
6.1
|
|
(109.7)
|
5.6
|
|
(94.5)
|
5.8
|
(94.5)
|
3.7
|
|
Deduction of mining royalty as an
allowable expense in determination of first category tax
|
|
29.5
|
(1.6)
|
|
29.5
|
(1.5)
|
|
23.1
|
(1.4)
|
23.1
|
(0.9)
|
|
Effect of increase in future
royalty tax on deferred tax balances
|
|
(34.3)
|
1.9
|
|
(34.3)
|
1.7
|
|
-
|
-
|
-
|
-
|
|
Items not deductible from first
category tax
|
|
(21.4)
|
1.2
|
|
(21.4)
|
1.1
|
|
(33.9)
|
2.1
|
(33.9)
|
1.3
|
|
Adjustment in respect of prior
years
|
|
4.5
|
(0.3)
|
|
4.5
|
(0.2)
|
|
(2.6)
|
0.1
|
(2.6)
|
0.1
|
|
Withholding tax
|
|
(1.4)
|
0.1
|
|
(1.4)
|
0.1
|
|
(73.0)
|
4.6
|
(73.0)
|
2.9
|
|
Tax effect of share of results of
associates and joint ventures
|
|
(3.6)
|
0.2
|
|
(3.6)
|
0.2
|
|
13.0
|
(0.8)
|
13.0
|
(0.5)
|
|
Impact of unrecognised tax losses
on current tax
|
|
(2.3)
|
0.1
|
|
(2.3)
|
0.1
|
|
0.2
|
-
|
0.2
|
-
|
|
Gain on disposal of investment in
joint venture
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
255.1
|
(10.0)
|
|
Difference in overseas tax
rate
|
|
-
|
-
|
|
3.3
|
(0.2)
|
|
-
|
-
|
-
|
-
|
|
Tax expense and effective tax rate for the Year
ended
|
|
(624.3)
|
34.7
|
|
(666.1)
|
33.9
|
|
(603.6)
|
37.4
|
(603.6)
|
23.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The effective tax rate (excluding
exceptional items) of 34.7% varied from the statutory rate
principally due to the mining tax (royalty) (net impact of $80.2
million / 4.5% including the deduction of the mining tax (royalty)
as an allowable expense in the determination of first category
tax), the one-off effect of the increase
in future royalty tax rates on deferred tax balances (impact of
$34.3 million / 1.9%), items not deductible for Chilean corporate
tax purposes, principally the funding of expenses outside of Chile
(impact of $21.4 million / 1.2%), the impact of the recognition of
the Group's share of results from associates and joint ventures,
which are included in the Group's profit before tax net of their
respective tax charges (impact of $3.6 million / 0.2%),
the impact of unrecognised tax losses (impact of
$2.3 million / 0.1%) and the withholding
tax relating to the remittance of profits from Chile (impact of
$1.4 million / 0.1%), partly offset by adjustments in respect of
prior years (impact of $4.5 million / 0.3%).
Exceptional items
Exceptional items are material
items of income and expense which are non-regular or non-operating
and typically non-cash, including impairments and profits or losses
on disposals. The classification of these types of items as
exceptional is considered to be useful as it provides an indication
of the earnings generated by the ongoing businesses of the
Group.
Compañia de Minas
Buenaventura S.A.A.
As detailed in Note 18, the Group
has entered into an agreement under which it is expected to acquire
up to 30 million shares in Compañia de Minas Buenaventura
S.A.A. An exceptional fair value pre-tax gain of $167.1 million
($125.3 million post tax) has been recognised during 2023 in
respect of this agreement.
Disposal of investment in Tethyan
joint venture (Reko Diq project)
On 15 December 2022, Antofagasta
entered into definitive agreements to exit its interest in the
Tethyan joint venture, which was a joint venture with Barrick Gold
Corporation ("Barrick") in respect of the Reko Diq project in
Pakistan. As a result, Antofagasta recognised a gain on disposal of
its investment in the joint venture as at 15 December 2022 of
$944.7 million. Full details of the agreements and gain on disposal
are set out in Note 14 to the Full-year results
announcement.
Non-controlling interests
Profit for 2023 attributable to
non-controlling interests was $464.3 million, compared with $422.3
million in 2022, an increase of $42.0 million. This reflected the
increase in earnings analysed above.
Earnings per share
|
|
|
Year ended
31.12.23
|
Year
ended
31.12.22
|
|
|
|
$ cents
|
$
cents
|
|
Underlying earnings per share
(excluding exceptional items)
|
|
72.0
|
59.7
|
|
Earnings per share (exceptional
items)
|
|
12.7
|
95.8
|
|
Earnings per share (including
exceptional items)
|
|
84.7
|
155.5
|
Earnings per share calculations
are based on 985,856,695 ordinary shares.
As a result of the factors set out
above, the underlying profit attributable to equity shareholders of
the Company (excluding exceptional items) was $709.8 million
compared with $588.3 million in 2022, giving underlying earnings
per share of 72.0 cents per share (2022 - 59.7 cents per share).
The profit attributable to equity shareholders (including
exceptional items) was $835.1 million (2022 - $1,533.0 million),
resulting in earnings per share of 84.7 cents per share (2022 -
155.5 cents per share).
Dividends
Dividends per share proposed in
relation to the period are as follows:
|
|
|
Year ended
31.12.23
|
Year
ended
31.12.22
|
|
|
|
$ cents
|
$
cents
|
|
Ordinary dividends:
|
|
|
|
|
Interim
|
|
11.7
|
9.2
|
|
Final
|
|
24.3
|
50.5
|
|
Total dividends to ordinary
shareholders
|
|
36.0
|
59.7
|
The Board determines the
appropriate dividend each year based on consideration of the
Group's cash balance, the level of free cash flow and underlying
earnings generated during the year and significant known or
expected funding commitments. It is expected that the total annual
dividend for each year would represent a payout ratio based on
underlying net earnings for that year of at least 35%.
The Board has recommended a final
dividend for 2023 of 24.3 cents per
ordinary share, which amounts to $239.6 million and will be paid
on 10 May 2024 to
shareholders on the share register at the close of business
on 19 April 2024.
The Board declared an interim
dividend for the first half of 2023 of 11.7 cents per ordinary
share, which amounted to $115.3 million.
This gives total dividends
proposed in relation to 2023 (including the interim dividend) of
36.0 cents per share or $354.9 million (2022 - 59.7 cents per
ordinary share or $588.3 million in total) equivalent to a payout
ratio of 50% of underlying earnings.
Capital expenditure
Capital expenditure increased by
$250.0 million from $1,879.2 million in 2022 to $2,129.2 million in
the current year, mainly due to increased mine development at
Centinela, Los Pelambres and Antucoya, and higher sustaining capex
at Los Pelambres and Centinela, partly offset by lower expenditure
on the INCO project at Los Pelambres.
Capital expenditure figures quoted
in this report are on a cash flow basis, unless stated
otherwise.
Derivative financial instruments
The Group periodically uses
derivative financial instruments to reduce its exposure to
commodity price, foreign exchange and interest rate movements. The
Group does not use such derivative instruments for speculative
trading purposes. At 31 December 2023, there were no derivative
financial instruments in place (2022 - nil).
Cash flows
The key features of the cash flow
statement are summarised in the following table.
|
|
|
Year
ended 31.12.23
|
Year
ended 31.12.22
|
|
|
|
$m
|
$m
|
|
Cash flows from continuing operations
|
|
3,027.1
|
2,738.3
|
|
Income tax paid
|
|
(528.1)
|
(787.1)
|
|
Net interest paid
|
|
(48.8)
|
(45.2)
|
|
Purchases of property, plant and
equipment
|
|
(2,129.2)
|
(1,879.2)
|
|
Dividends paid to equity holders of
the Company
|
|
(613.2)
|
(1,262.9)
|
|
Dividends paid to non-controlling
interests
|
|
(388.0)
|
(80.0)
|
|
Dividends from associates and joint
ventures
|
|
-
|
50.0
|
|
Disposal of JV
|
|
944.7
|
-
|
|
Investment in other financial
assets
|
|
(290.1)
|
-
|
|
Acquisition of equity
investments
|
|
(60.7)
|
(66.5)
|
|
Other items
|
|
(0.8)
|
0.1
|
|
Changes in net debt relating to cash
flows
|
|
(87.1)
|
(1,332.5)
|
|
Other non-cash movements
|
|
(187.6)
|
(70.4)
|
|
Effects of changes in foreign
exchange rates
|
|
0.7
|
(23.4)
|
|
Movement in net debt in the
period
|
|
(274.0)
|
(1,426.3)
|
|
(Net debt)/net cash at the beginning
of the year
|
|
(885.8)
|
540.5
|
|
Net
debt at the end of the year
|
|
(1,159.8)
|
(885.8)
|
Cash flows from continuing
operations were $3,027.1 million in 2023 compared with $2,738.3
million in 2022. This reflected EBITDA from subsidiaries for
the year of $2,994.1 million (2022 - $2,777.5 million)
adjusted for the positive impact of a net working
capital decrease of $14.3 million (2022 -
working capital increase of $12.7 million) and a non-cash increase
in provisions of $18.7 million (2022 - decrease of $26.5
million).
The net cash outflow in respect of
tax in 2023 was $528.1 million (2022 - $787.1 million). This amount
differs from the current tax charge in the consolidated income
statement (including exceptional items) of $586.8 million (2022 -
$448.8 million) as the cash tax payments reflect payments on
account for the current year based on prior periods' profit levels
of $544.3 million (2022 - $435.6 million), the settlement of
outstanding balances in respect of the previous year's tax charge
of $14.7 million (2022 - $332.1 million) and withholding tax
payments of $2.1 million (2022 - $24.5 million), partly
offset by the recovery of $33.0 million relating to prior years
(2022 - $5.1 million).
Contributions and loans to
associates and joint ventures were $0.7 million (2022 -
nil).
Capital expenditure in 2023 was
$2,129.2 million compared with $1,879.2 million in 2022. This
included expenditure of $1,044.6 million at Centinela (2022 -
$857.0 million), $897.1 million at Los Pelambres (2022 - $889.7
million), $121.6 million at Antucoya (2022 - $66.9 million), $15.5
million at the corporate centre (2022 - $10.8 million) and $50.4
million at the Transport division (2022 - $54.8 million).
The higher total capex compared with the prior
year reflects increased mine development at Centinela, Los
Pelambres and Antucoya, and higher sustaining capex at Los
Pelambres and Centinela, partly offset by lower expenditure on the
INCO project at Los Pelambres.
As detailed in Note 14, in
December 2022 Antofagasta completed its disposal of its 50%
interest in the Tethyan joint venture. It was agreed that the
disposal proceeds would be distributed to Antofagasta during 2023.
In May 2023, the disposal proceeds of $944.7 million, plus interest
of $11.6 million, were received by the Group.
There was a cash outflow of $290.1
million in respect of investment in other financial assets in 2023
(2022 - nil).
Acquisitions of equity investments
were $60.7 million in 2023 (2022 - $66.5 million).
Dividends paid to equity holders
of the Company were $613.2 million (2022 - $1,262.9 million) of
which $497.9 million related to the payment of the previous year's
final dividend and $115.3 million to the interim dividend declared
in respect of the current year.
Dividends paid by subsidiaries to
non-controlling shareholders were $388.0 million (2022 - $80.0
million).
Dividends received from associates
and joint ventures were nil for 2023 (2022 - $50.0
million).
Financial position
|
|
|
|
At
31.12.23
|
At
31.12.22
|
|
|
|
|
$m
|
$m
|
|
Cash, cash equivalents and liquid
investments
|
|
|
2,919.4
|
2,391.2
|
|
Total borrowings and other financial
liabilities
|
|
|
(4,079.2)
|
(3,277.0)
|
|
Net debt at the end of the
period
|
|
|
(1,159.8)
|
(885.8)
|
At 31 December 2023, the Group had
combined cash, cash equivalents and liquid investments of $2,919.4
million (31 December 2022 - $2,391.2 million). Excluding the
non-controlling interest share in each partly-owned operation, the
Group's attributable share of cash, cash equivalents and liquid
investments was $2,490.5 million (31 December 2022 - $1,991.0
million).
Total Group borrowings and other
financial liabilities at 31 December 2023 were $4,079.2 million, an
increase of $802.2 million on the prior year (31 December 2022 -
$3,277.0 million). The increase was mainly
due to $1,062.2 million of additional senior loans at Los Pelambres
($797.2 million) and Centinela ($265.0 million) and $178.6 million
of new finance leases, partly offset by a $381.7 million
repayment of the senior loans at Los Pelambres
($210.3 million), Centinela ($111.1 million), Antucoya ($50.0
million), and the Transport division ($10.3 million).
Excluding the non-controlling interest share in
each partly-owned operation, the Group's attributable share of the
borrowings was $2,948.3 million (31 December 2022 - $2,449.7
million).
These movements resulted in net
debt at 31 December 2023 of $1,159.8 million (31 December 2022 -
net debt $885.8 million). Excluding the non-controlling interest
share in each partly-owned operation, the Group had an attributable
net debt position of $457.8 million (31 December 2022 - net cash
$458.7 million).
Going concern
The consolidated financial
information contained in this unaudited Full-year results
announcement has been prepared on the going concern basis. Details
of the factors which have been taken into account in assessing the
Group's going concern status are set out in Note 1 to the
Full-year results announcement.
Cautionary statement about forward-looking
statements
This Full-year results announcement
contains certain forward-looking statements. All statements other
than historical facts are forward-looking statements. Examples of
forward-looking statements include those regarding the Group's
strategy, plans, objectives or future operating or financial
performance, reserve and resource estimates, commodity demand and
trends in commodity prices, growth opportunities, and any
assumptions underlying or relating to any of the foregoing. Words
such as "intend", "aim", "project", "anticipate", "estimate",
"plan", "believe", "expect", "may", "should", "will", "continue"
and similar expressions identify forward-looking
statements.
Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other
factors that are beyond the Group's control. Given these risks,
uncertainties and assumptions, actual results could differ
materially from any future results expressed or implied by these
forward-looking statements, which apply only as at the date of this
report. Important factors that could cause actual results to differ
from those in the forward-looking statements include: global
economic conditions, demand, supply and prices for copper and other
long-term commodity price assumptions (as they materially affect
the timing and feasibility of future projects and developments),
trends in the copper mining industry and conditions of the
international copper markets, the effect of currency exchange rates
on commodity prices and operating costs, the availability and costs
associated with mining inputs and labour, operating or technical
difficulties in connection with mining or development activities,
employee relations, litigation, and actions and activities of
governmental authorities, including changes in laws, regulations or
taxation. Except as required by applicable law, rule or regulation,
the Group does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Past performance cannot be relied on
as a guide to future performance.
Consolidated Income Statement
|
|
|
|
|
Year ended 31.12.2023
(Unaudited)
|
|
|
Year
ended 31.12.2022 (Audited)
|
|
|
|
Excluding exceptional
items
|
Exceptional items
note 3
|
Total
|
Excluding exceptional items
|
Exceptional items
note 3
|
Total
|
|
|
Notes
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Group revenue
|
5
|
6,324.5
|
-
|
6,324.5
|
5,862.0
|
-
|
5,862.0
|
|
Total operating costs
|
2
|
(4,541.7)
|
-
|
(4,541.7)
|
(4,227.7)
|
-
|
(4,227.7)
|
|
Operating profit from subsidiaries
|
2
|
1,782.8
|
-
|
1,782.8
|
1,634.3
|
-
|
1,634.3
|
|
Net share of results of associates
and joint ventures
|
2
|
(13.5)
|
-
|
(13.5)
|
48.1
|
-
|
48.1
|
|
Gain on disposal of investment in
joint venture
|
3
|
-
|
-
|
-
|
-
|
944.7
|
944.7
|
|
Operating profit from subsidiaries, and share of total
results from associates and joint ventures
|
|
1,769.3
|
-
|
1,769.3
|
1,682.4
|
944.7
|
2,627.1
|
|
Investment income
|
8
|
138.1
|
-
|
138.1
|
40.2
|
-
|
40.2
|
|
Interest expense
|
8
|
(105.6)
|
-
|
(105.6)
|
(78.6)
|
-
|
(78.6)
|
|
Other finance items
|
3
|
(3.4)
|
167.1
|
163.7
|
(29.8)
|
-
|
(29.8)
|
|
Net
finance income/(expense)
|
8
|
29.1
|
167.1
|
196.2
|
(68.2)
|
-
|
(68.2)
|
|
Profit before tax
|
|
1,798.4
|
167.1
|
1,965.5
|
1,614.2
|
944.7
|
2,558.9
|
|
Income tax expense
|
9
|
(624.3)
|
(41.8)
|
(666.1)
|
(603.6)
|
-
|
(603.6)
|
|
Profit from continuing operations
|
|
1,174.1
|
125.3
|
1,299.4
|
1,010.6
|
944.7
|
1,955.3
|
|
Profit for the year
|
|
1,174.1
|
125.3
|
1,299.4
|
1,010.6
|
944.7
|
1,955.3
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
464.3
|
-
|
464.3
|
422.3
|
-
|
422.3
|
|
Owners of the parent
|
|
709.8
|
125.3
|
835.1
|
588.3
|
944.7
|
1,533.0
|
|
|
|
|
|
|
|
|
|
|
|
|
US
cents
|
US
cents
|
US
cents
|
US
cents
|
US
cents
|
US
cents
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
From continuing
operations
|
10
|
72.0
|
12.7
|
84.7
|
59.7
|
95.8
|
155.5
|
Consolidated Statement of Comprehensive
Income
|
|
Notes
|
Year ended 31.12.2023
(Unaudited)
|
Year
ended 31.12.2022 (Audited)
|
|
|
|
|
|
|
|
|
$m
|
$m
|
|
Profit for the year
|
5
|
1,299.4
|
1,955.3
|
|
Items that may be or were subsequently reclassified to profit
or loss:
|
|
|
|
|
Currency translation
adjustment
|
|
(0.5)
|
(0.4)
|
|
Total items that may be or were subsequently reclassified to
profit or loss
|
|
(0.5)
|
(0.4)
|
|
|
|
|
|
|
Items that will not be subsequently reclassified to profit or
loss:
|
|
|
|
|
Actuarial gains/(losses) on defined
benefit plans
|
20
|
10.7
|
(18.1)
|
|
Gains on fair value of equity
investments
|
16
|
137.0
|
15.8
|
|
Tax on items recognised directly in
equity that will not be reclassified
|
22
|
(40.8)
|
5.7
|
|
Share of other comprehensive losses
of associates and joint ventures, net of tax
|
|
(0.6)
|
-
|
|
Total Items that will not be subsequently reclassified to
profit or loss
|
|
106.3
|
3.4
|
|
|
|
|
|
|
Total other comprehensive income
|
|
105.8
|
3.0
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
1,405.2
|
1,958.3
|
|
Attributable to:
|
|
|
|
|
Non-controlling interests
|
|
467.6
|
418.1
|
|
Owners of the parent
|
|
937.6
|
1,540.2
|
|
|
|
|
|
|
Total comprehensive income for the
year - continuing operations
|
|
1,405.2
|
1,958.3
|
|
|
|
1,405.2
|
1,958.3
|
Consolidated Statement of Changes in Equity
|
For
the year ended 31.12.2023 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Share
premium
|
Other
reserves (Note 24)
|
Retained
earnings (Note 24)
|
Equity attributable to
owners of the parent
|
Non-
controlling interests
|
Total
equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Balance at 1 January
2023
|
89.8
|
199.2
|
5.0
|
8,333.5
|
8,627.5
|
3,016.9
|
11,644.4
|
|
Profit for the year
|
-
|
-
|
-
|
835.1
|
835.1
|
464.3
|
1,299.4
|
|
Other comprehensive income for the
year
|
-
|
-
|
99.5
|
3.0
|
102.5
|
3.3
|
105.8
|
|
Total comprehensive income for the year
|
-
|
-
|
99.5
|
838.1
|
937.6
|
467.6
|
1,405.2
|
|
Dividends
|
-
|
-
|
-
|
(613.2)
|
(613.2)
|
(388.0)
|
(1,001.2)
|
|
Balance at 31 December 2023
|
89.8
|
199.2
|
104.5
|
8,558.4
|
8,951.9
|
3,096.5
|
12,048.4
|
|
For
the year ended 31.12.2022 (Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Share
premium
|
Other
reserves
(Note
24)
|
Retained
earnings
(Note
24)
|
Equity attributable to
owners of the parent
|
Non-
controlling interests
|
Total
equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Balance at 1 January
2022
|
89.8
|
199.2
|
(10.4)
|
8,071.6
|
8,350.2
|
2,678.8
|
11,029.0
|
|
Profit for the year
|
-
|
-
|
-
|
1,533.0
|
1,533.0
|
422.3
|
1,955.3
|
|
Other comprehensive
income/(expense) for the year
|
-
|
-
|
15.4
|
(8.2)
|
7.2
|
(4.2)
|
3.0
|
|
Total comprehensive income for the year
|
-
|
-
|
15.4
|
1,524.8
|
1,540.2
|
418.1
|
1,958.3
|
|
Dividends
|
-
|
-
|
-
|
(1,262.9)
|
(1,262.9)
|
(80.0)
|
(1,342.9)
|
|
Balance at 31 December 2022
|
89.8
|
199.2
|
5.0
|
8,333.5
|
8,627.5
|
3,016.9
|
11,644.4
|
Consolidated Balance Sheet
|
|
|
|
At 31.12.2023
(Unaudited)
|
At
31.12.2022 (Audited)
|
|
|
|
|
|
|
|
Non-current assets
|
Notes
|
|
$m
|
$m
|
|
Property, plant and
equipment
|
13
|
|
12,678.7
|
11,543.5
|
|
Other non-current assets
|
|
|
-
|
1.1
|
|
Inventories
|
17
|
|
457.0
|
347.0
|
|
Investments in associates and joint
ventures
|
15
|
|
891.1
|
904.6
|
|
Trade and other
receivables
|
|
|
68.5
|
51.0
|
|
Equity investments
|
16
|
|
288.6
|
90.5
|
|
Deferred tax assets
|
22
|
|
72.0
|
78.5
|
|
|
|
|
14,455.9
|
13,016.2
|
|
Current assets
|
|
|
|
|
|
Inventories
|
17
|
|
671.0
|
708.1
|
|
Trade and other
receivables
|
|
|
1,117.8
|
2,087.2
|
|
Other financial asset
|
18
|
|
457.2
|
-
|
|
Current tax assets
|
|
|
25.9
|
35.6
|
|
Liquid investments
|
26
|
|
2,274.7
|
1,580.8
|
|
Cash and cash equivalents
|
26
|
|
644.7
|
810.4
|
|
|
|
|
5,191.3
|
5,222.1
|
|
|
|
|
|
|
|
Total assets
|
|
|
19,647.2
|
18,238.3
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Short-term borrowings and other
financial liabilities
|
19
|
|
(901.9)
|
(432.5)
|
|
Trade and other payables
|
|
|
(1,171.5)
|
(1,079.7)
|
|
Short-term decommissioning and
restoration provisions
|
21
|
|
(15.2)
|
(33.2)
|
|
Current tax liabilities
|
|
|
(100.7)
|
(60.4)
|
|
|
|
|
(2,189.3)
|
(1,605.8)
|
|
Non-current liabilities
|
|
|
|
|
|
Medium and long-term borrowings and
other financial liabilities
|
19
|
|
(3,177.3)
|
(2,844.5)
|
|
Trade and other payables
|
|
|
(9.8)
|
(8.0)
|
|
Post-employment benefit
obligations
|
20
|
|
(139.9)
|
(137.3)
|
|
Decommissioning and restoration
provisions
|
21
|
|
(425.9)
|
(455.0)
|
|
Deferred tax liabilities
|
22
|
|
(1,656.6)
|
(1,543.3)
|
|
|
|
|
(5,409.5)
|
(4,988.1)
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
(7,598.8)
|
(6,593.9)
|
|
|
|
|
|
|
|
Net
assets
|
|
|
12,048.4
|
11,644.4
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
23
|
|
89.8
|
89.8
|
|
Share premium
|
23
|
|
199.2
|
199.2
|
|
Other reserves
|
24
|
|
104.5
|
5.0
|
|
Retained earnings
|
24
|
|
8,558.4
|
8,333.5
|
|
Equity attributable to owners of the parent
|
|
|
8,951.9
|
8,627.5
|
|
Non-controlling interests
|
|
|
3,096.5
|
3,016.9
|
|
Total equity
|
|
|
12,048.4
|
11,644.4
|
The consolidated financial
information was approved by the Board of Directors on 19 February
2024.
Consolidated Cash Flow
Statement
|
|
|
|
At 31.12.2023
(Unaudited)
|
At
31.12.2022 (Audited)
|
|
|
Notes
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Cash flows from continuing operations
|
25
|
|
3,027.1
|
2,738.3
|
|
Interest paid
|
|
|
(166.0)
|
(74.3)
|
|
Income tax paid
|
|
|
(528.1)
|
(787.1)
|
|
Net
cash from operating activities
|
|
|
2,333.0
|
1,876.9
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Capital contributions to associates
and joint ventures
|
15
|
|
(0.6)
|
-
|
|
Dividends from associates and joint
ventures
|
15
|
|
-
|
50.0
|
|
Investment in other financial
assets
|
18
|
|
(290.1)
|
-
|
|
Acquisition of equity
investments
|
16
|
|
(60.7)
|
(66.5)
|
|
Proceeds from disposal of investment
in joint venture
|
14
|
|
944.7
|
-
|
|
Proceeds from sale of property,
plant and equipment
|
|
|
-
|
0.2
|
|
Purchases of property, plant and
equipment
|
|
|
(2,129.2)
|
(1,879.2)
|
|
Net (increase)/decrease in liquid
investments
|
26
|
|
(674.2)
|
1,388.9
|
|
Interest received
|
|
|
117.1
|
29.1
|
|
Net
cash used in investing activities
|
|
|
(2,093.0)
|
(477.5)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Dividends paid to equity holders of
the company
|
|
|
(613.2)
|
(1,262.9)
|
|
Dividends paid to preference
shareholders of the Company
|
|
|
(0.1)
|
(0.1)
|
|
Dividends paid to non-controlling
interests
|
|
|
(388.0)
|
(80.0)
|
|
Proceeds from issue of new
borrowings
|
26
|
|
1,062.2
|
865.9
|
|
Repayments of borrowings
|
26
|
|
(381.7)
|
(751.3)
|
|
Principal elements of lease
payments
|
26
|
|
(81.2)
|
(105.4)
|
|
|
|
|
|
|
|
Net
cash used in financing activities
|
|
|
(402.0)
|
(1,333.8)
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and
cash equivalents
|
26
|
|
(162.0)
|
65.6
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of the year
|
|
|
810.4
|
743.4
|
|
Net
(decrease)/increase in cash and cash equivalents
|
26
|
|
(162.0)
|
65.6
|
|
Effect of foreign exchange rate
changes
|
26
|
|
(3.7)
|
1.4
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the
year
|
26
|
|
644.7
|
810.4
|
Notes
1. General
information and accounting policies
a)
General information
The consolidated financial
information for the year ended 31 December 2023 was approved for
issue by the Board of Directors of the Company on 19 February 2024.
The consolidated financial information is unaudited but is derived
from the Group's full financial accounts, which are in the final
stages of being prepared.
This consolidated financial
information has been prepared under the accounting policies as set
out in the statutory accounts for the year ended 31 December 2022,
subject to the new accounting standards as detailed in note 1(b)
below (which as noted had no material impact on the amounts
reported in this financial information).
The consolidated financial
statements of the Antofagasta plc Group for the year ended 31
December 2023 are being prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those
standards.
The consolidated financial
information has been prepared on the going concern
basis.
The consolidated financial
information does not include all of the notes of the type normally
included in annual financial statements. Accordingly, the
consolidated financial information is not in full accordance with
UK-adopted International Accounting standards.
The information contained in this
announcement for the year ended 31 December 2022 also does not
constitute statutory accounts. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified, with no matters
by way of emphasis, and did not contain statements under sections
498(2) or (3) of the Companies Act 2006.
The information contained in the
Alternative performance measures and Production and Sales
Statistics section of this consolidated financial information is
not derived from the statutory accounts for the years ended 31
December 2023 and 2022 and is accordingly not covered/will not be
covered by the auditors' reports.
Going concern
The Directors have assessed the
going concern status of the Group, considering the period to 31
December 2025.
The Group's business activities,
together with those factors likely to affect its future
performance, are set out in the Financial
and Operating Review, and in particular within the Review of
Operations. Details of the cash flows of the Group during the
period, along with its financial position at the period-end, are
set out in the Financial Review. The consolidated financial
information includes details of the Group's cash, cash equivalents
and liquid investment balances in Note 26, and details of
borrowings are set out in Note 19.
When assessing the going concern
status of the Group, the Directors have considered in particular
its financial position, including its significant balance of cash,
cash equivalents and liquid investments and the terms and remaining
durations of the borrowing facilities in place. The Group had a
strong financial position as at 31 December 2023, with combined
cash, cash equivalents and liquid investments of $2,919.4 million.
Total borrowings were $4,079.2 million, resulting in a net debt
position of $1,159.8 million. Of the total borrowings, only 22% is
repayable within one year, and 16% repayable between one and two
years.
When assessing the prospects of
the Group, the Directors have considered the Group's copper price
forecasts, the Group's expected production levels, operating cost
profile and capital expenditure. These forecasts are based on the
Group's budgets and life-of-mine models, which are also used when
assessing relevant accounting estimates, including depreciation,
deferred stripping and closure provisions, and accounting
judgements including potential indicators of impairment.
The principal analysis has only
considered existing committed borrowing facilities in place as of
31 December 2023, and has not assumed that any new borrowing
facilities will be put in place. Given the planned financing for
the Centinela Second Concentrator project was not in place as at 31
December 2023, we have not included the planned development of that
project within this principal scenario. As an additional scenario
we have forecast the impact of the development of this project,
which assumes a typical financing environment which allows us to
put in place our planned financing for the project. In addition, we
have also modelled sensitivities reflecting the impact of potential
overruns in the project costs.
The forecasts have assumed
distributions in line with the Group's policy that the total annual
dividend for each year would represent a payout ratio based on
underlying net earnings (as defined in the Alternative Performance
Measures section) for that year of at least 35%.
The Directors have assessed the
key risks which could impact the prospects of the Group over the
going concern period and consider the most relevant to be risks to
the copper price outlook, as this is the factor most likely to
result in significant volatility in earnings and cash generation.
Robust down-side sensitivity analyses have been performed in
relation to the principal analysis described above, assessing the
standalone impact of each of:
· A
significant deterioration in the future copper price forecasts, by
an average of approximately 15% throughout the going concern
period.
· An
even more pronounced short-term reduction of 50 c/lb in the copper
price for a period of three months, in addition to the above
general deterioration in the copper price throughout the review
period.
· The
potential impact of the Group's most significant individual
operational risks.
· A
shutdown of any one of the Group's operations for a period of three
months, or a shut-down of all of the Group's operations for a
period of one month.
The stability of tailings storage
facilities represents a potentially significant operational risk
for mining operations globally. The Group's tailings storage
facilities are designed to international standards, constructed
using downstream methods, subject to rigorous monitoring and
reporting, and reviewed regularly by an international panel of
independent experts. Given these standards of design, development,
operations and review, the impact of a potential tailings dam
failure has not been included in the sensitivity
analysis.
The above downside sensitivity
analyses indicated results which could be managed in the normal
course of business, including the aggregate impact of a number of
the above sensitivities occurring at the same time. The analysis
indicated that the Group is expected to remain in compliance with
all of the covenant requirements of its borrowings throughout the
review period and retain sufficient liquidity. Based on their
assessment of the Group's prospects, the Directors have formed a
judgement, at the time of approving the financial statements, that
there are no material uncertainties that the Directors are aware of
that cast doubt on the Group's going concern status and that there
is a reasonable expectation that the Group has adequate resources
to continue in operational existence for the period to 31 December
2025. The Directors therefore consider it appropriate to adopt the
going concern basis of accounting in preparing the financial
information.
b)
Adoption of new accounting standards
Other accounting standards
The following accounting
standards, amendments and interpretations became effective in the
current reporting period but the application of these standards and
interpretations had no material impact on the amounts reported in
this consolidated financial information:
The following accounting
standards, amendments and interpretations became effective in the
current reporting period:
· IFRS
17, Insurance Contracts
· Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12)
· Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
· Definition of Accounting Estimates - Amendments to IAS
8
· International Tax Reform - Pillar Two Model Rules (Amendments
to IAS 12)
The application of these standards
and interpretations effective for the first time in the current
year has had no significant impact on the amounts reported in these
financial statements.
c)
Accounting standards issued but not yet effective
At the date of authorisation of
this financial information, the following standards and
interpretations, which have not been applied in this financial
information, were in issue but not yet effective. It is expected
that where applicable, these standards and amendments will be
adopted on each respective effective date. None of these standards
are expected to have a significant impact on the Group.
|
Amendments to IFRSs
|
Effective date
|
|
Lease Liability in a Sale and
Leaseback (Amendments to IFRS 16)
|
Annual periods beginning on or
after January 1, 2024
|
|
Classification of Liabilities as
Current or Non-Current (Amendments to IAS 1)
|
Annual periods beginning on or
after January 1, 2024
|
|
Non-current Liabilities with
Covenants (Amendments to IAS 1)
|
Annual periods beginning on or
after January 1, 2024
|
|
Supplier Finance Arrangements
(Amendments to IAS 7 and IFRS 7)
|
Annual periods beginning on or
after January 1, 2024
|
|
Lack of Exchangeability (Amendments
to IAS 21)1
|
Annual periods beginning on or
after January 1, 2025
|
1 This amendment is still subject to UK endorsement.
d)
Critical accounting judgements and key sources of estimation
uncertainty
The critical accounting judgements
and keys estimates applied in this consolidated financial
information are:
Judgements
· Non-financial assets impairment- see Note 4 for relevant
details
Estimates
· Deferred taxation - see Note 22 for relevant
details
2. Operating profit from subsidiaries, and share
of total results from associates and joint
ventures
|
|
|
Year ended 31.12.2023
(Unaudited)
|
Year
ended 31.12.2022 (Audited)
|
|
|
|
|
|
|
|
|
$m
|
$m
|
|
Revenue
|
|
6,324.5
|
5,862.0
|
|
Cost of sales
|
|
(3,666.4)
|
(3,432.7)
|
|
Gross profit
|
|
2,658.1
|
2,429.3
|
|
Administrative and distribution
expenses
|
|
(618.5)
|
(558.9)
|
|
Other operating income
|
|
50.8
|
37.9
|
|
Other operating expenses
1
|
|
(307.6)
|
(274.0)
|
|
Operating profit from subsidiaries
|
|
1,782.8
|
1,634.3
|
|
Net share of results from associates
and joint ventures
|
|
(13.5)
|
48.1
|
|
Gain on disposal of investment in
joint venture
|
|
-
|
944.7
|
|
Total operating profit from subsidiaries, and share of total
results from associates and joint ventures
|
1,769.3
|
2,627.1
|
1Other operating expenses comprise $141.1 million of
exploration and evaluation expenditure (2022 - $113.0 million),
$25.7 million in respect of the employee severance provision (2022
- $19.1 million), $12.8 million in respect of the decommissioning
and restoration provisions (2022 - $15.4 million - restated from
the previously reported figure of $16.9 million in order to ensure
consistency with the reconciliation reflected in Note 21), and
$128.0 million of other expenses (2022 - $125.0
million).
3. Exceptional items
Exceptional items are material
items of income and expense which are non-regular or non-operating
and typically non-cash, including impairments and profits or losses
on disposals. The classification of these types of items as
exceptional is considered to be useful as it provides an indication
of the earnings generated by the ongoing businesses of the
Group.
2023 - Compañía de Minas
Buenaventura S.A.A.
As detailed in Notes 7 and 18, the
Group has entered into an agreement under which it is expected to
acquire up to an additional 30 million shares in Compañia de Minas
Buenaventura S.A.A. An exceptional fair value gain of $167.1
million was recognised during 2023 in respect of this agreement. A
deferred tax expense of $41.8 million has been recognised in
respect of this gain (see Note 9), resulting in a post-tax impact
of $125.3 million.
2022 - Disposal of investment in
Tethyan joint venture (Reko Diq project)
On 15 December 2022, Antofagasta
entered into definitive agreements to exit its interest in the Tethyan
joint venture, which was a joint venture with Barrick Gold
Corporation in respect of the Reko Diq project in Pakistan. As a
result, Antofagasta recognised a gain on disposal of its investment
in the joint venture as at 15 December 2022 of $944.7
million. The disposal proceeds were
received by the Group in May 2023. Full
details of the agreements and gain on disposal are set out in Note
14.
4. Asset sensitivities
There
were no indicators of potential impairment, or reversal of previous
impairments, for the Group's non-current assets associated with its
mining operations at the 2023 year-end, and accordingly no
impairment tests have been performed. The impairment indicator
assessment included consideration of the potential indicators set
out in IAS 36, 'Impairment of Assets', which included quantitative
analysis based on the operations' life-of-mine models ("the
models"). These models provide indicative valuations and do not
represent, or comply with, a formal impairment assessment prepared
in accordance with IAS 36. Sensitivity analyses have been performed
on the models to quantify the impact of changes in assumptions to
which the models are most sensitive and to support the overall
impairment indicator assessment.
As noted above, no qualitative
indicators of potential impairment or potential reversal of
impairment were identified. Similarly, no quantitative
indicators of impairment were identified, with the models used
within the impairment indicator assessment continuing to indicate
positive headroom for all of the Group's mining operations,
including the Zaldívar joint venture, with the indicated value of
the assets in excess of their carrying value.
Relevant aspects of this process
are detailed below:
Copper price
outlook
The
assumption to which the value of the assets is most sensitive is
the future long-term copper price. The copper price forecasts
(representing the Group's estimates of the assumptions that would
be used by independent market participants in valuing the assets)
are based on the forward curve for the short term and consensus
analyst forecasts for the longer term. A long-term copper price of
$3.70/lb (reflecting 2023 real terms) has been used in the models
considered as part of the impairment indicator assessment, which
has increased from $3.50/lb (reflecting 2022 real terms) at the
prior year-end. As an additional down-side sensitivity an
indicative valuation (based on the models) was performed with a
long-term copper price of $3.33/lb, reflecting a 10% reduction in
the long-term price forecast. Los Pelambres and Centinela still
showed positive headroom in their models in this alternative
down-side scenario. However, the Antucoya indicative valuation
indicated a potential deficit of $60.0 million (2022 - potential
deficit of $400 million) and the Zaldívar valuation indicated a
potential deficit of $60 million (2022 - potential deficit of $170
million) (on a 50% basis). This was a simple sensitivity exercise,
looking at an illustrative change in the forecast long-term copper
price in isolation. In reality, a deterioration in the long-term
copper price environment is likely to result in corresponding
improvements in a range of input cost factors. In particular, given
that copper exports account for over 50% of Chile's exports,
historically there has often been a correlation between movements
in the copper price and the US dollar/Chilean peso exchange rate,
and a decrease in the copper price may therefore result in a
weakening of the Chilean peso, with a resulting reduction in the
Group's operating costs and capital expenditure in US$ terms. These
likely cost reductions, as well as potential operational changes
which could be made in a weaker copper price environment, could
partly mitigate the impact of the lower copper price modelled in
these estimated potential sensitivities.
The US dollar/Chilean peso
exchange rate
The value
of the assets is also sensitive to movements in the US
dollar/Chilean peso exchange rate. A long-term exchange rate of
Ch$785/$1 has been used in the models considered as part of the
impairment indicator assessment. This compares with the long-term
exchange rate of CH$850/$1 used in 2022. As an additional down-side
sensitivity an indicative valuation was prepared with a 10%
stronger long-term Chilean peso exchange rate assumption. All of
the Group's mining operations still showed positive headroom in
their models in this alternative down-side scenario. As noted
above, historically there has often been a correlation between
movements in the copper price and the US dollar/Chilean peso
exchange rate, and so a strengthening of the Chilean peso may often
reflect a stronger copper price environment, which could mitigate
the impact of a stronger exchange rate.
Discount rate
A real post-tax discount rate of 8%
(2022 - 8%), calculated using relevant market data, has been used
in the impairment indicator assessment.
Climate-related impacts
The assessments reflect the Group's
estimates of potential future climate-related impacts. The Group
discloses in line with the recommendations of the Task Force on
Climate-related Financial Disclosures ("TCFD"). This process
includes scenario analyses assessing the potential future impact of
transition and physical risks, as well as potential copper price
upside (for example, due to increased demand for the construction
of electric vehicles and renewable power generating capacity). On
the basis that the potential copper price upside is expected to
exceed the downside impact of future risks, no specific adjustments
have been reflected in these assessments in relation to
climate-change.
Other relevant assumptions
In addition to the impact of the
future copper price, the US dollar/Chilean peso exchange rate, the
discount rate and climate-related impacts, the models used in the
impairment indicator assessment are sensitive to the assumptions in
respect of future production levels, operating costs, and
sustaining and development capital expenditure.
In the case of Zaldívar, in addition
to the assumptions made in respect of the factors outlined above,
the conclusion that there are no impairment indicators reflects
certain assumptions about future operational considerations to
which the model considered as part of the impairment indicator
assessment is sensitive, in particular the following:
•
The operational performance experienced in 2023, in particular the
lower than expected throughput levels, is not considered to be
indicative of future performance levels, with throughput and
recovery levels forecast to increase over future years.
•
Currently, Zaldívar is permitted to extract water and mine until
2025, following the approval of the Declaration of Environmental
Impact ("DIA") in early 2024 to align both the permits for mining
and water extraction. In March 2023, Zaldívar submitted a ("DIA"),
which is a more limited scope and simplified procedure than an
Environmental Impact Assessment ("EIA"). The DIA submitted
requested that the mining permit be extended from 2024 to 2025, to
expire at the same date as the current water permit and in January
2024 this DIA application was approved. The mine life after 2025 is
subject to an EIA application which was filed in June 2023 to
extend mining and water environmental permits through 2051 and
Zaldívar simultaneously withdrew an earlier EIA application filed
in 2018 which remained unresolved. This EIA includes a proposal to
develop the primary sulphide ore deposit, extending the current
life of mine and requiring investments over the mine life of $1.2
billion, and a conversion of the water source for Zaldívar to
either seawater or water from third parties, following a transition
period during which the current continental water extraction permit
is extended from 2025 to 2028. The impairment indicator assessment
assumes that the EIA will be granted, to enable the continued
operation of the mine without interruption. However, if this is not
the case, this is likely to be considered an indicator of a
potential impairment, requiring an IAS 36 impairment assessment at
that point.
•
Zaldívar's final pit phase, which represents approximately 20% of
current ore reserves, impacts a portion of Minera Escondida's mine
property, as well as infrastructure owned by third parties. Mining
of the phase will be subject to agreements or easements to access
these areas and relocate the infrastructure, and related permits.
In July 2023, Zaldívar reached an agreement with Escondida in
respect to mining matters and certain cost sharing. The impairment
indicator assessment assumes that the additional necessary
agreements, easements and permits will be obtained to allow the
mining of the final pit phase.
The carrying value of the Group's
investment in joint venture balance in respect of Zaldívar as at 31
December 2023 was $881.3 million (2022 - $897.3
million).
5. Segmental analysis
The Group's reportable
segments, which are the same as its
operating segments, are as
follows:
· Los Pelambres
· Centinela
· Antucoya
· Zaldívar
· Exploration and evaluation
· Corporate and other items
· Transport division
For
management purposes, the Group is organised into two business
divisions based on their products - Mining and Transport. The
mining division is split further for management reporting purposes
to show results by mine and exploration activity. Los Pelambres
produces primarily copper concentrate and molybdenum as a
by-product. Centinela produces copper concentrate containing gold
as a by-product, copper cathodes and molybdenum concentrates.
Antucoya and Zaldívar produce copper cathodes. The transport
division provides rail and road cargo transport together with a
number of ancillary services. All the operations are based in
Chile. The Exploration and evaluation segment incurs exploration
and evaluation expenses. "Corporate and other items" comprises
costs incurred by Antofagasta plc, Antofagasta Minerals S.A., the
Group's mining corporate centre and other entities that are not
allocated to any individual business segment. Consistent with its
internal management reporting, the Group's corporate and other
items are included within the mining division.
The Chief
Operating decision-maker (the Group's Chief Executive Officer)
monitors the operating results of the business segments separately
for the purpose of making decisions about resources to be allocated
and assessing performance. Segment performance is evaluated based
on the operating profit of each of the segments.
a) Segment revenues
and results
|
For
the year ended 31.12.2023 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Los
Pelambres
|
Centinela
|
Antucoya
|
Zaldívar
|
Exploration and evaluation2
|
Corporate and other items
|
Total
Mining
|
Transport
division
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
2,923.8
|
2,532.5
|
672.3
|
-
|
-
|
-
|
6,128.6
|
195.9
|
6,324.5
|
|
Operating costs excluding
depreciation
|
(1,199.2)
|
(1,313.5)
|
(457.2)
|
-
|
(141.1)
|
(98.7)
|
(3,209.7)
|
(120.7)
|
(3,330.4)
|
|
Depreciation
|
(318.6)
|
(727.3)
|
(109.4)
|
-
|
-
|
(24.3)
|
(1,179.6)
|
(31.7)
|
(1,211.3)
|
|
Operating profit/(loss)
|
1,406.0
|
491.7
|
105.7
|
-
|
(141.1)
|
(123.0)
|
1,739.3
|
43.5
|
1,782.8
|
|
Net share of results from associates
and joint ventures
|
-
|
-
|
-
|
(15.4)
|
-
|
-
|
(15.4)
|
1.9
|
(13.5)
|
|
Total operating profit from subsidiaries, and share of total
results from associates and joint ventures.
|
1,406.0
|
491.7
|
105.7
|
(15.4)
|
(141.1)
|
(123.0)
|
1,723.9
|
45.4
|
1,769.3
|
|
Investment income
|
38.0
|
20.3
|
6.8
|
-
|
-
|
72.2
|
137.3
|
0.8
|
138.1
|
|
Interest expense
|
(4.3)
|
(20.3)
|
(30.7)
|
-
|
-
|
(49.2)
|
(104.5)
|
(1.1)
|
(105.6)
|
|
Other finance items (Excluding
exceptional items)
|
(0.2)
|
(0.2)
|
(0.4)
|
-
|
-
|
(1.9)
|
(2.7)
|
(0.7)
|
(3.4)
|
|
Fair value gain on other financial
assets - exceptional items 3
|
-
|
-
|
-
|
-
|
-
|
167.1
|
167.1
|
-
|
167.1
|
|
Profit/(loss) before tax
|
1,439.5
|
491.5
|
81.4
|
(15.4)
|
(141.1)
|
65.2
|
1,921.1
|
44.4
|
1,965.5
|
|
Tax
|
(465.2)
|
(143.1)
|
(14.6)
|
-
|
-
|
13.7
|
(609.2)
|
(15.1)
|
(624.3)
|
|
Tax - exceptional items
|
-
|
-
|
-
|
-
|
-
|
(41.8)
|
(41.8)
|
-
|
(41.8)
|
|
Profit/(loss) for the year
|
974.3
|
348.4
|
66.8
|
(15.4)
|
(141.1)
|
37.1
|
1,270.1
|
29.3
|
1,299.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
372.5
|
89.5
|
5.5
|
-
|
-
|
(3.2)
|
464.3
|
-
|
464.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) attributable to the owners of the
parent
|
601.8
|
258.9
|
61.3
|
(15.4)
|
(141.1)
|
40.3
|
805.8
|
29.3
|
835.1
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA1
|
1,724.6
|
1,219.0
|
215.1
|
86.8
|
(141.1)
|
(98.7)
|
3,005.7
|
81.5
|
3,087.2
|
|
Additions to non-current assets
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment
|
914.3
|
1,182.4
|
140.7
|
-
|
-
|
19.0
|
2,256.4
|
51.5
|
2,307.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets and
liabilities
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
7,414.0
|
6,533.6
|
1,732.7
|
-
|
-
|
2,657.6
|
18,337.9
|
418.2
|
18,756.1
|
|
Investments in associates and joint
ventures
|
-
|
-
|
-
|
881.3
|
-
|
-
|
881.3
|
9.8
|
891.1
|
|
Segment liabilities
|
(3,829.1)
|
(1,857.0)
|
(535.2)
|
-
|
-
|
(1,304.7)
|
(7,526.0)
|
(72.8)
|
(7,598.8)
|
1 EBITDA refers to Earnings Before Interest, Tax, Depreciation
and Amortisation. EBITDA is calculated by adding back depreciation,
amortisation, profit or loss on disposals and impairment charges to
operating profit. This comprises 100% of the EBITDA from the
Group´s subsidiaries, and the Group´s proportional share of the
EBITDA of its associates and joint ventures.
2 Operating cash outflow in the exploration and evaluation
segment was $137.5 million.
3 An exceptional fair value gain of $167.1 million has been
recognised in respect of an agreement under which the Group is
expected to acquire up to 30 million shares in Compañia de Minas
Buenaventura S.A.A., as detailed in Notes 3 and 18.
For
the year ended 31.12.2022 (Audited)
|
|
Los
Pelambres
|
Centinela
|
Antucoya
|
Zaldívar
|
Exploration and evaluation2
|
Corporate and other items
|
Total
Mining
|
Transport division
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
2,558.9
|
2,406.2
|
703.5
|
-
|
-
|
-
|
5,668.6
|
193.4
|
5,862.0
|
|
Operating costs excluding
depreciation
|
(1,086.1)
|
(1,249.0)
|
(442.3)
|
-
|
(113.0)
|
(75.0)
|
(2,965.4)
|
(119.1)
|
(3,084.5)
|
|
Depreciation
|
(276.1)
|
(710.2)
|
(105.6)
|
-
|
-
|
(18.7)
|
(1,110.6)
|
(30.5)
|
(1,141.1)
|
|
Loss on disposals
|
(0.5)
|
(1.0)
|
-
|
-
|
-
|
(0.6)
|
(2.1)
|
-
|
(2.1)
|
|
Operating profit/(loss)
|
1,196.2
|
446.0
|
155.6
|
-
|
(113.0)
|
(94.3)
|
1,590.5
|
43.8
|
1,634.3
|
|
Net share of results from associates
and joint ventures
|
-
|
-
|
-
|
47.3
|
-
|
(0.7)
|
46.6
|
1.5
|
48.1
|
|
Gain on disposal of investment in
joint venture 3
|
-
|
-
|
-
|
-
|
-
|
944.7
|
944.7
|
-
|
944.7
|
|
Total operating profit from subsidiaries, and share of total
results from associates and joint ventures.
|
1,196.2
|
446.0
|
155.6
|
47.3
|
(113.0)
|
849.7
|
2,581.8
|
45.3
|
2,627.1
|
|
Investment income
|
10.7
|
6.6
|
2.4
|
-
|
-
|
19.8
|
39.5
|
0.7
|
40.2
|
|
Interest expense
|
(3.3)
|
(10.6)
|
(19.9)
|
-
|
-
|
(44.2)
|
(78.0)
|
(0.6)
|
(78.6)
|
|
Other finance items
|
(5.2)
|
(11.3)
|
(6.6)
|
-
|
-
|
(5.0)
|
(28.1)
|
(1.7)
|
(29.8)
|
|
Profit/(loss) before tax
|
1,198.4
|
430.7
|
131.5
|
47.3
|
(113.0)
|
820.3
|
2,515.2
|
43.7
|
2,558.9
|
|
Tax
|
(371.8)
|
(130.8)
|
(34.9)
|
-
|
-
|
(50.8)
|
(588.3)
|
(15.3)
|
(603.6)
|
|
Profit/(loss) for the year
|
826.6
|
299.9
|
96.6
|
47.3
|
(113.0)
|
769.5
|
1,926.9
|
28.4
|
1,955.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
319.3
|
82.9
|
21.2
|
-
|
-
|
(1.1)
|
422.3
|
-
|
422.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) attributable to owners of the
parent
|
507.3
|
217.0
|
75.4
|
47.3
|
(113.0)
|
770.6
|
1,504.6
|
28.4
|
1,533.0
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA1
|
1,472.8
|
1,157.2
|
261.2
|
147.2
|
(113.0)
|
(75.7)
|
2,849.7
|
80.0
|
2,929.7
|
|
Additions to non-current assets
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment
|
965.2
|
889.0
|
75.1
|
-
|
0.5
|
16.4
|
1,946.2
|
55.8
|
2,002.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets and
liabilities
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
6,786.6
|
5,922.8
|
1,708.0
|
-
|
-
|
2,504.1
|
16,921.5
|
412.2
|
17,333.7
|
|
Investments in associates and joint
ventures
|
-
|
-
|
-
|
897.3
|
-
|
-
|
897.3
|
7.3
|
904.6
|
|
Segment liabilities
|
(3,155.0)
|
(1,565.1)
|
(558.1)
|
-
|
-
|
(1,225.8)
|
(6,504.0)
|
(89.9)
|
(6,593.9)
|
1 EBITDA refers to Earnings Before Interest, Tax, Depreciation
and Amortisation. EBITDA is calculated by adding back depreciation,
amortisation, profit or loss on disposals and impairment charges to
operating profit. This comprises 100% of the EBITDA from the
Group´s subsidiaries, and the Group´s proportional share of the
EBITDA of its associates and joint ventures.
2 Operating cash outflow in the exploration and evaluation
segment was $98.3 million.
3 An exceptional gain of $944.7 million has been recognised in
respect of the Group's disposal of its investment in the Tethyan
joint venture (Reko Diq project) (see notes 3 and 14)
b) Entity wide disclosures
Revenue by product
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$m
|
$m
|
|
Copper
|
|
|
|
- Los
Pelambres
|
2,381.1
|
2,107.7
|
|
- Centinela
concentrates
|
1,309.8
|
1,132.7
|
|
- Centinela
cathodes
|
692.6
|
844.4
|
|
- Antucoya
|
666.1
|
697.5
|
|
Provision of shipping services
|
|
|
|
- Los
Pelambres
|
50.3
|
51.9
|
|
- Centinela
concentrates
|
35.3
|
58.5
|
|
- Centinela
cathodes
|
6.0
|
6.7
|
|
- Antucoya
|
6.2
|
6.0
|
|
Gold
|
|
|
|
- Los
Pelambres
|
83.5
|
75.4
|
|
- Centinela
concentrates
|
323.4
|
238.4
|
|
Molybdenum
|
|
|
|
- Los
Pelambres
|
373.2
|
291.4
|
|
- Centinela
concentrates
|
131.0
|
100.8
|
|
Silver
|
|
|
|
- Los
Pelambres
|
35.7
|
32.5
|
|
- Centinela
concentrates
|
34.4
|
24.7
|
|
|
|
|
|
Total Mining
|
6,128.6
|
5,668.6
|
|
Transport division
|
195.9
|
193.4
|
|
|
6,324.5
|
5,862.0
|
Revenue by location of customer
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$m
|
$m
|
|
Europe
|
|
|
|
- United
Kingdom
|
22.8
|
71.0
|
|
- Switzerland
|
386.5
|
753.6
|
|
- Spain
|
-
|
1.0
|
|
- Germany
|
200.0
|
140.0
|
|
- Rest of
Europe
|
89.9
|
96.5
|
|
Latin America
|
|
|
|
- Chile
|
399.5
|
369.1
|
|
- Rest of Latin
America
|
133.0
|
179.7
|
|
North America
|
|
|
|
- United
States
|
441.7
|
312.3
|
|
Asia Pacific
|
|
|
|
- Japan
|
1,989.6
|
1,668.6
|
|
- China
|
1,417.3
|
1,072.0
|
|
- Singapore
|
450.2
|
423.8
|
|
- South Korea
|
391.1
|
332.2
|
|
- Hong Kong
|
204.7
|
178.2
|
|
- Rest of
Asia
|
198.2
|
264.0
|
|
|
6,324.5
|
5,862.0
|
Information about major
customers
In the year ended 31 December
2023, the Group´s mining revenue included $1,081.0 million related
to one large customer that individually accounted for more than 10%
of the Group's revenue (year ended 31 December 2022 - one large
customer representing $785.5 million).
Non-current assets by location of asset
|
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
|
$m
|
$m
|
|
- Chile
|
|
14,017.3
|
12,786.1
|
|
- Other
|
|
9.5
|
10.1
|
|
|
|
14,026.8
|
12,796.2
|
|
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
|
$m
|
$m
|
|
Non-current assets per the
balance sheet
|
|
14,455.9
|
13,016.2
|
|
|
|
|
|
|
The above amounts reflect
non-current assets excluding;
|
|
|
|
|
- Deferred tax assets
|
|
(72.0)
|
(78.5)
|
|
- Trade and other receivables
|
|
(68.5)
|
(51.0)
|
|
- Equity investments
|
|
(288.6)
|
(90.5)
|
|
Total non-current assets
excluding the above
|
|
(429.1)
|
(220.0)
|
|
|
|
|
|
|
Non-current assets by location
of asset
|
|
14,026.8
|
12,796.2
|
6. Group Revenue
Copper and molybdenum concentrate
sale contracts and copper cathode sale contracts generally provide
for provisional pricing of sales at the time of shipment, with
final pricing being based on the monthly average London Metal
Exchange copper price or monthly average molybdenum price for
specified future periods. This normally ranges from one to four
months after shipment to the customer. For sales contracts which
contain provisional pricing mechanisms, the total receivable
balance is measured at fair value through profit or loss. Gains and
losses from the mark-to-market of open sales are recognised through
adjustments to revenue in the income statement and to trade
receivables in the balance sheet. The Group determines
mark-to-market prices using forward prices at each period-end for
copper concentrate and cathode sales, and period-end month average
prices for molybdenum concentrate sales due to the absence of a
futures market in the market price references for that commodity in
the majority of the Group's contracts.
With sales of concentrates, which
are sold to smelters and roasting plants for further processing
into fully refined metal, the price of the concentrate (which is
the amount recorded as revenue) reflects the market value of the
fully refined metal less a "treatment and refining charge"
deduction, to reflect the lower value of this partially processed
material compared with the fully refined metal.
The shipping service represents a
separate performance obligation, and is recognised separately from
the sale of the material over time as the shipping service is
provided.
The total revenue from contracts
with customers and the impact of provisional pricing adjustments in
respect of concentrate and cathode sales is as follows:
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$m
|
$m
|
|
Revenue from contracts with
customers
|
|
|
|
Sale of products
|
6,016.2
|
5,671.2
|
|
Provision of shipping services
associated with the sale of products 1
|
97.8
|
123.1
|
|
Transport division
2
|
195.9
|
193.4
|
|
|
|
|
|
Provisional pricing adjustments in
respect of copper, gold and molybdenum
|
14.6
|
(125.7)
|
|
|
|
|
|
Total revenue
|
6,324.5
|
5,862.0
|
1The Group sells a significant
proportion of its products on Cost, Insurance & freight (CIF)
incoterms, which means that the Group is responsible for shipping
the product to a destination port specified by the
customer
2The transport division provides rail and road cargo transport
together with a number of ancillary services.
The categories of revenue which
are principally affected by different economic factors are the
individual product types. A summary of revenue by product is set
out in Note 5(b).
The following tables set out the
impact of provisional pricing adjustments, derivative commodity
instruments and treatment and refining charges for the more
significant products. The revenue from these products, along with
the revenue from other products and services, is reconciled to
total revenue in Note 5(b).
For the year ended 31 December 2023
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
Los
Pelambres
|
Centinela
|
Centinela
|
Antucoya
|
Los
Pelambres
|
Centinela
|
Los
Pelambres
|
Centinela
|
|
|
Copper
concentrate
|
Copper
concentrate
|
Copper
cathodes
|
Copper
cathodes
|
Gold in
concentrate
|
Gold in
concentrate
|
Molybdenum
concentrate
|
Molybdenum
concentrate
|
|
|
|
|
|
|
|
|
|
|
|
Provisionally priced sales of products
|
2,465.4
|
1,363.1
|
689.5
|
663.9
|
79.2
|
319.3
|
455.4
|
161.1
|
|
Revenue from freight services
|
50.3
|
35.3
|
6.0
|
6.2
|
-
|
-
|
-
|
-
|
|
|
2,515.7
|
1,398.4
|
695.5
|
670.1
|
79.2
|
319.3
|
455.4
|
161.1
|
|
Effects of pricing adjustments to previous year
invoices
|
|
|
|
|
|
|
|
|
|
Reversal of mark-to-market
adjustments at the end of the previous year
|
(38.0)
|
(19.9)
|
(0.8)
|
(0.8)
|
-
|
(2.7)
|
(12.6)
|
(7.6)
|
|
Settlement of sales invoiced in the
previous year
|
90.9
|
52.9
|
10.3
|
7.7
|
2.9
|
1.0
|
40.0
|
15.9
|
|
Total effect of adjustments to previous year invoices in the
current year
|
52.9
|
33.0
|
9.5
|
6.9
|
2.9
|
(1.7)
|
27.4
|
8.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of pricing adjustments to current year
invoices
|
|
|
|
|
|
|
|
|
|
Settlement of sales invoiced in the
current year
|
(52.2)
|
(19.0)
|
(6.7)
|
(4.9)
|
1.5
|
3.9
|
(84.1)
|
(27.3)
|
|
Mark-to-market adjustments at the
end of the current year
|
45.1
|
16.2
|
0.3
|
0.2
|
-
|
2.6
|
(1.0)
|
(0.4)
|
|
Total effect of adjustments to current year
invoices
|
(7.1)
|
(2.8)
|
(6.4)
|
(4.7)
|
1.5
|
6.5
|
(85.1)
|
(27.7)
|
|
|
|
|
|
|
|
|
|
|
|
Total pricing adjustments
|
45.8
|
30.2
|
3.1
|
2.2
|
4.4
|
4.8
|
(57.7)
|
(19.4)
|
|
Realised losses on commodity derivatives
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before deducting treatment & refining
charges
|
2,561.5
|
1,428.6
|
698.6
|
672.3
|
83.6
|
324.1
|
397.7
|
141.7
|
|
|
|
|
|
|
|
|
|
|
|
Treatment and refining charges
|
(130.1)
|
(83.5)
|
-
|
-
|
(0.1)
|
(0.7)
|
(24.5)
|
(10.7)
|
|
Revenue net of tolling charges
|
|
|
|
|
|
|
|
|
|
2,431.4
|
1,345.1
|
698.6
|
672.3
|
83.5
|
323.4
|
373.2
|
131.0
|
The revenue from the individual
products shown in the above table excludes revenue from sales of
silver and the transport division, which are presented in the
revenue by product table in note 5 to reconcile to Group
Revenue.
With sales of concentrates at Los Pelambres and Centinela, which
are sold to smelters and roasting plants for further processing
into fully refined metal, the price of the concentrate invoiced to
the customer reflects the market value of the fully refined metal
less a "treatment and refining charge" deduction, to reflect the
lower value of this partially processed material compared with the
fully refined metal. For accounting purposes, the revenue amount is
the net of the market value of fully refined metal less the
treatment and refining charges. Under the standard industry
definition of cash costs, treatment and refining charges are
regarded as an expense and part of the total cash cost
figure.
For the year ended 31 December 2022
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
Los
Pelambres
|
Centinela
|
Centinela
|
Antucoya
|
Los
Pelambres
|
Centinela
|
Los
Pelambres
|
Centinela
|
|
|
Copper
concentrate
|
Copper
concentrate
|
Copper
cathodes
|
Copper
cathodes
|
Gold in
concentrate
|
Gold in
concentrate
|
Molybdenum
concentrate
|
Molybdenum
concentrate
|
|
|
|
|
|
|
|
|
|
|
|
Provisionally priced sales of products
|
2,313.7
|
1,231.8
|
851.8
|
710.6
|
75.1
|
235.9
|
281.3
|
98.5
|
|
Revenue from freight services
|
51.9
|
58.5
|
6.7
|
6.0
|
-
|
-
|
-
|
-
|
|
|
2,365.6
|
1,290.3
|
858.5
|
716.6
|
75.1
|
235.9
|
281.3
|
98.5
|
|
Effects of pricing adjustments to previous year
invoices
|
|
|
|
|
|
|
|
|
|
Reversal of mark-to-market
adjustments at the end of the previous year
|
(12.0)
|
(5.2)
|
(0.3)
|
(0.8)
|
-
|
(0.3)
|
5.6
|
0.7
|
|
Settlement of sales invoiced in the
previous year
|
10.7
|
23.3
|
0.5
|
1.0
|
-
|
3.6
|
(4.1)
|
(0.6)
|
|
Total effect of adjustments to previous year invoices in the
current year
|
(1.3)
|
18.1
|
0.2
|
0.2
|
-
|
3.3
|
1.5
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of pricing adjustments to current year
invoices
|
|
|
|
|
|
|
|
|
|
Settlement of sales invoiced in the
current year
|
(155.3)
|
(68.7)
|
(8.4)
|
(14.1)
|
0.4
|
(2.9)
|
16.5
|
4.0
|
|
Mark-to-market adjustments at the
end of the current year
|
38.0
|
19.9
|
0.8
|
0.8
|
-
|
2.7
|
12.6
|
7.6
|
|
Total effect of adjustments to current year
invoices
|
(117.3)
|
(48.8)
|
(7.6)
|
(13.3)
|
0.4
|
(0.2)
|
29.1
|
11.6
|
|
|
|
|
|
|
|
|
|
|
|
Total pricing adjustments
|
(118.6)
|
(30.7)
|
(7.4)
|
(13.1)
|
0.4
|
3.1
|
30.6
|
11.7
|
|
Realised losses on commodity derivatives
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before deducting treatment & refining
charges
|
2,247.0
|
1,259.6
|
851.1
|
703.5
|
75.5
|
239.0
|
311.9
|
110.2
|
|
|
|
|
|
|
|
|
|
|
|
Treatment and refining charges
|
(87.4)
|
(68.4)
|
-
|
-
|
(0.1)
|
(0.6)
|
(20.5)
|
(9.4)
|
|
Revenue net of tolling charges
|
|
|
|
|
|
|
|
|
|
2,159.6
|
1,191.2
|
851.1
|
703.5
|
75.4
|
238.4
|
291.4
|
100.8
|
The revenue from the individual
products shown in the above table excludes revenue from sales of
silver and the transport division, which are presented in the
revenue by product table in note 5 to reconcile to Group
Revenue.
With sales of concentrates at Los Pelambres and Centinela, which
are sold to smelters and roasting plants for further processing
into fully refined metal, the price of the concentrate invoiced to
the customer reflects the market value of the fully refined metal
less a "treatment and refining charge" deduction, to reflect the
lower value of this partially processed material compared with the
fully refined metal. For accounting purposes, the revenue amount is
the net of the market value of fully refined metal less the
treatment and refining charges. Under the standard industry
definition of cash costs, treatment and refining charges are
regarded as an expense and part of the total cash cost
figure.
(i) Copper
concentrate
The typical period for which sales
of copper concentrate remain open until settlement occurs is a
range of approximately three to four months from shipment
date.
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Sales provisionally priced at the
balance sheet date
|
Tonnes
|
181,400
|
179,000
|
|
Average mark-to-market
price
|
$/lb
|
3.87
|
3.80
|
|
Average provisional invoice
price
|
$/lb
|
3.72
|
3.65
|
(ii) Copper
cathodes
The typical period for which sales
of copper cathodes remain open until settlement occurs is
approximately one month from shipment
date.
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Sales provisionally priced at the
balance sheet date
|
Tonnes
|
16,400
|
22,700
|
|
Average mark-to-market
price
|
$/lb
|
3.85
|
3.80
|
|
Average provisional invoice
price
|
$/lb
|
3.84
|
3.77
|
(iii) Gold in
concentrate
The typical period for which sales
of gold in concentrate remain open until settlement is
approximately one month from shipment date.
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Sales provisionally priced at the
balance sheet date
|
Ounces
|
32,400
|
31,000
|
|
Average mark-to-market
price
|
$/oz
|
2,072
|
1,828
|
|
Average provisional invoice
price
|
$/oz
|
1,992
|
1,742
|
(iv) Molybdenum
concentrate
The typical period for which sales
of molybdenum remain open until settlement is approximately two
months from shipment date.
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Sales provisionally priced at the
balance sheet date
|
Tonnes
|
2,600
|
2,500
|
|
Average mark-to-market
price
|
$/lb
|
18.50
|
26.10
|
|
Average provisional invoice
price
|
$/lb
|
18.80
|
22.20
|
As detailed above, the effects of
gains and losses from the marking-to-market of open sales are
recognised through adjustments to revenue in the income statement
and to trade receivables in the balance sheet. The effect of
mark-to-market adjustments on the balance sheet at the end of each
period are as follows:
|
|
|
Effect on debtors of year
end
|
|
mark-to-market
adjustments
|
|
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
|
$m
|
$m
|
|
Los Pelambres - copper
concentrate
|
|
45.1
|
38.0
|
|
Los Pelambres - molybdenum
concentrate
|
|
(1.0)
|
12.6
|
|
Centinela - copper
concentrate
|
|
16.2
|
19.9
|
|
Centinela - molybdenum
concentrate
|
|
(0.4)
|
7.6
|
|
Centinela - gold in
concentrate
|
|
2.6
|
2.7
|
|
Centinela - copper
cathodes
|
|
0.3
|
0.8
|
|
Antucoya - copper
cathodes
|
|
0.2
|
0.8
|
|
|
|
63.0
|
82.4
|
7. Financial instruments and financial risk
management
a)
Categories of financial instruments
The carrying value of financial
assets and financial liabilities is shown below:
|
|
For the year ended
31.12.2023
|
|
|
At fair
value through profit and loss
|
At fair
value through other comprehensive income
|
Held at
amortised cost
|
Total
|
|
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets
|
|
|
|
|
|
Equity investments
|
-
|
288.6
|
-
|
288.6
|
|
Trade and other
receivables
|
916.5
|
-
|
157.1
|
1,073.6
|
|
Other financial assets
|
457.2
|
-
|
-
|
457.2
|
|
Cash and cash equivalents
|
1.1
|
-
|
643.6
|
644.7
|
|
Liquid investments
|
2,274.7
|
-
|
-
|
2,274.7
|
|
|
3,649.5
|
288.6
|
800.7
|
4,738.8
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other payables
|
-
|
-
|
(1,154.3)
|
(1,154.3)
|
|
Borrowings and leases
|
-
|
-
|
(4,079.2)
|
(4,079.2)
|
|
|
-
|
-
|
(5,233.5)
|
(5,233.5)
|
|
|
For the year ended
31.12.2022
|
|
|
At fair
value through profit and loss
|
At fair
value through other comprehensive income
|
Held at
amortised cost
|
Total
|
|
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets
|
|
|
|
|
|
Equity investments
|
-
|
90.5
|
-
|
90.5
|
|
Trade and other
receivables
|
897.2
|
-
|
1,047.5
|
1,944.7
|
|
Cash and cash equivalents
|
8.5
|
-
|
801.9
|
810.4
|
|
Liquid investments
|
1,580.8
|
-
|
-
|
1,580.8
|
|
|
2,486.5
|
90.5
|
1,849.4
|
4,426.4
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other payables
|
-
|
-
|
(1,067.3)
|
(1,067.3)
|
|
Borrowings and leases
|
-
|
-
|
(3,277.0)
|
(3,277.0)
|
|
|
-
|
-
|
(4,344.3)
|
(4,344.3)
|
The fair value of the fixed rate
bonds included within the "Borrowings and leases" category was
$908.3 million at 31 December 2023 compared with its carrying value
of $986.8 million. The fair value of all other financial assets and
financial liabilities carried at amortised cost approximates the
carrying value presented above.
The Group has the following
financial instruments:
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
Financial assets
|
|
|
|
Trade and other receivables
(non-current) per balance sheet
|
68.5
|
51.0
|
|
Trade and other receivables
(current) per balance sheet
|
1,117.8
|
2,087.2
|
|
Total trade and other receivables
per balance sheet
|
1,186.3
|
2,138.2
|
|
Less: non-financial assets
(including prepayments and VAT receivables)
|
(112.7)
|
(193.5)
|
|
Total trade and other receivables
(financial assets)
|
1,073.6
|
1,944.7
|
|
|
|
|
|
Financial liabilities
|
|
|
|
Trade and other payables (current)
per balance sheet
|
(1,171.5)
|
(1,079.7)
|
|
Trade and other payables
(non-current) per balance sheet
|
(9.8)
|
(8.0)
|
|
Total trade and other payables per
balance sheet
|
(1,181.3)
|
(1,087.7)
|
|
Less: non-financial liabilities
(including VAT payables)
|
27.0
|
20.4
|
|
Total trade and other payables
(financial liabilities)
|
(1,154.3)
|
(1,067.3)
|
Fair value of financial instruments
An analysis of financial assets
and financial liabilities measured at fair value is presented
below:
|
|
For the year ended
31.12.2023
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets
|
|
|
|
|
|
Equity investments (a)
|
288.6
|
-
|
-
|
288.6
|
|
Trade and other receivables
(b)
|
-
|
916.5
|
-
|
916.5
|
|
Other financial assets
(c)
|
-
|
457.2
|
-
|
457.2
|
|
Cash and cash equivalents
(d)
|
1.1
|
-
|
-
|
1.1
|
|
Liquid investments (e)
|
-
|
2,274.7
|
-
|
2,274.7
|
|
|
289.7
|
3,648.4
|
-
|
3,938.1
|
|
|
For the
year ended 31.12.2022
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets
|
|
|
|
|
|
Equity investments (a)
|
90.5
|
-
|
-
|
90.5
|
|
Trade and other receivables
(b)
|
-
|
897.2
|
-
|
897.2
|
|
Cash and cash equivalents
(d)
|
8.5
|
-
|
-
|
8.5
|
|
Liquid investments (e)
|
-
|
1,580.8
|
-
|
1,580.8
|
|
|
99.0
|
2,478.0
|
-
|
2,577.0
|
Recurring fair value measurements
are those that are required in the balance sheet at the end of each
reporting year.
a) Equity investments are investments in shares on active
markets and are valued using unadjusted quoted market values of the
shares at the financial reporting date. These are level 1 inputs as
described below.
b) Provisionally priced metal sales for the period are
marked-to-market at the end of the period. Gains and losses from
the marking-to-market of open sales are recognised through
adjustments to revenue in the income statement and trade
receivables in the balance sheet. Forward prices at the end of the
period are used for copper sales while December average prices are
used for molybdenum concentrate sales. These are level 2 inputs as
described below.
c) The other financial asset relates to an agreement the Group
has entered into under which the Group is expected to acquire up to
30 million shares in Compañia de Minas Buenaventura S.A.A.
("Buenaventura") (as detailed in Note 18). As at 31 December 2023,
an "other financial asset" balance has been recognised on the
balance sheet in respect of the agreement, at its fair value of
$457.2 million. A fair value gain of $167.1 million has been
recognised during 2023 in respect of this asset. The fair value of
the other financial asset has been calculated using observable
market data, in particular the share price of Buenaventura as at 29
December 2023 (the last trading day in 2023). These are level 2
inputs. The valuation also assumes that the Group will acquire all
30 million shares and the agreement runs to its scheduled maturity,
although this is not considered to be a significant factor in
determining the fair value based on the assessed likelihood and
impact of an early termination occurring.
d) The element of cash and cash equivalents measured at fair
value relates to money market funds, which are valued reflecting
market prices at the period end. These are level 1 inputs as
described below.
e) Liquid investments are highly liquid current asset
investments that are valued reflecting market prices at the period
end. These are level 2 inputs as described below.
The inputs to the valuation
techniques described above are categorised into three levels,
giving the highest priority to unadjusted quoted prices in active
markets (level 1) and the lowest priority to unobservable inputs
(level 3 inputs):
-
Level 1 fair value measurement inputs are
unadjusted quoted prices in active markets for identical assets or
liabilities.
-
Level 2 fair value measurement inputs are derived
from inputs other than quoted market prices included in level 1
that are observable for the asset or liability, either directly or
indirectly.
-
Level 3 fair value measurement inputs are
unobservable inputs for the asset or liability.
The degree to which inputs into
the valuation techniques used to measure the financial assets and
liabilities are observable and the significance of these inputs in
the valuation are considered in determining whether any transfers
between levels have occurred. In the year ended 31 December 2023,
there were no transfers between levels in the hierarchy.
8. Net finance income/(expense)
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$m
|
$m
|
|
Investment income
|
|
|
|
Interest receivable
|
43.1
|
19.8
|
|
Gains on liquid investments held at
fair value through profit or loss
|
95.0
|
20.4
|
|
|
138.1
|
40.2
|
|
|
|
|
|
Interest expense
|
|
|
|
Interest expense
|
(105.6)
|
(78.6)
|
|
|
(105.6)
|
(78.6)
|
|
|
|
|
|
Other finance items
|
|
|
|
Unwinding of discount on
provisions
|
(15.8)
|
(16.9)
|
|
Exceptional fair value
gain
|
167.1
|
-
|
|
Effects of changes in foreign
exchange rates
|
12.5
|
(12.8)
|
|
Preference dividends
|
(0.1)
|
(0.1)
|
|
|
163.7
|
(29.8)
|
|
Net
finance income/(expense)
|
196.2
|
(68.2)
|
During 2023, amounts capitalised
and consequently not included within the above table were as
follows: $7.9 million at Centinela (year
ended 31 December 2022 - $2.0
million) and $104.2 million at Los Pelambres (year ended 31 December 2022 -
$47.0 million).
The interest expense shown above
includes $10.5 million in respect of leases (2022 - $7.1 million).
The interest paid in respect of leases was $9.7million (2022 -
$6.0 million)
An exceptional fair value gain of
$167.1 million has been recognised in respect of an agreement under
which the Group is expected to acquire up to 30 million shares in
Compañia de Minas Buenaventura S.A.A., as detailed in Notes 3 and
18.
9. Income tax expense
The tax charge for the period
comprised the following:
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Current tax charge
|
|
|
|
Corporate tax (principally first
category tax in Chile)
|
(472.8)
|
(340.4)
|
|
Mining tax (royalty)
|
(109.3)
|
(83.9)
|
|
Withholding tax
|
(4.5)
|
(24.5)
|
|
Exchange rate
|
(0.2)
|
-
|
|
|
(586.8)
|
(448.8)
|
|
|
|
|
|
Deferred tax
|
|
|
|
Corporate tax (principally first
category tax in Chile)
|
47.1
|
(96.5)
|
|
Mining tax (royalty)
|
(53.5)
|
(9.8)
|
|
Adjustment to deferred tax
attributable to changes in tax rates
|
(34.3)
|
-
|
|
Exceptional Items
|
(41.8)
|
-
|
|
Withholding tax
|
3.2
|
(48.5)
|
|
|
(79.3)
|
(154.8)
|
|
|
|
|
|
Total tax charge (income tax expense)
|
(666.1)
|
(603.6)
|
The rate of first category (ie
corporate) tax in Chile is 27.0% (2022 - 27.0%).
In addition to first category tax
and the mining tax, the Group incurs withholding taxes on any
remittance of profits from Chile. Withholding tax is levied on
remittances of profits from Chile at 35% less first category (ie
corporate) tax already paid in respect of the profits to which the
remittances relate. The withholding tax charge in the current
period reflected a one-off adjustment of $34.7 million to the
provision for deferred withholding tax, as a result of an
intra-group restructuring of intercompany balances.
The Group's mining operations are
also subject to a mining tax (royalty). During 2023, production
from Los Pelambres, Antucoya, Encuentro (oxides), the Tesoro North
East pit and the Run-of-Mine processing at Centinela Cathodes was
subject to a rate of between 5-14%, depending on the level of
operating profit margin, and production from Centinela Concentrates
and the Tesoro Central and Mirador pits at Centinela Cathodes was
subject to a rate of 5% of taxable operating profit.
New mining royalty
In August 2023, the new Chilean
mining royalty law was approved. The new law took effect from 1
January 2024, replacing the existing specific mining tax. However,
companies with tax stability agreements will continue to be
governed by their current terms until those agreements expire. The
new regime applied to Los Pelambres' and Zaldivar's royalty
payments from the start of 2024. Centinela and Antucoya had tax
stability agreements which extend beyond that point, and so the new
royalty rates will only impact their royalty payments from 2030
onwards for both companies.
The new royalty terms include a 1%
ad valorem royalty on copper sales, as well as a royalty ranging
from 8% to 26% applied to the "Mining Operating Margin", depending
on each mining operation's level of profitability. The new royalty
terms include a cap, establishing that total taxation, which
includes corporate income tax, the two components of the new mining
royalty, and theoretical tax on dividends, should not exceed a rate
of 46.5% (relative to the Mining Operating Margin less the royalty
ad-valorem expense).
The impact on the Group's royalty
payments starting in 2024 will be subject to various factors,
including future revenue and earnings, which will be influenced by
parameters such as copper prices, production volumes, and operating
costs. A one-off adjustment has been recognized to the deferred tax
balances of all of the Group's mining operations as at 31 December
2023, resulting in an increase in the Group's deferred tax
liability balance of $34.3 million, along with a corresponding
deferred tax expense. The Chilean tax authority has issued
definitive interpretations regarding the methodologies for
determining and calculating the new royalty amounts. The new
administrative interpretation refers to all issues included in the
new Royalty Law published in August 2023.
The following table provides a
numerical reconciliation between the accounting profit before tax
multiplied by the applicable statutory tax rate and the total tax
expense (including both current and deferred tax).
|
|
|
Year ended
Excluding exceptional
items
31.12.2023
|
|
Year ended
Including exceptional
items
31.12.2023
|
|
Year
ended
Excluding exceptional items
31.12.2022
|
|
Year
ended
Including exceptional items
31.12.2022
|
|
|
|
$m
|
%
|
|
$m
|
%
|
|
$m
|
%
|
|
$m
|
%
|
|
Profit before tax
|
|
1,798.4
|
|
|
1,965.5
|
|
|
1,614.2
|
|
|
2,558.9
|
|
|
Profit before tax multiplied by
Chilean corporate tax rate of 27%
|
|
(485.6)
|
27.0
|
|
(530.7)
|
27.0
|
|
(435.9)
|
27.0
|
|
(691.0)
|
27.0
|
|
Mining Tax (royalty)
|
|
(109.7)
|
6.1
|
|
(109.7)
|
5.6
|
|
(94.5)
|
5.8
|
|
(94.5)
|
3.7
|
|
Deduction of mining royalty as an
allowable expense in determination of first category tax
|
|
29.5
|
(1.6)
|
|
29.5
|
(1.5)
|
|
23.1
|
(1.4)
|
|
23.1
|
(0.9)
|
|
Items not deductible from first
category tax
|
|
(21.4)
|
1.2
|
|
(21.4)
|
1.1
|
|
(33.9)
|
2.1
|
|
(33.9)
|
1.3
|
|
Adjustment in respect of prior
years
|
|
4.5
|
(0.3)
|
|
4.5
|
(0.2)
|
|
(2.6)
|
0.1
|
|
(2.6)
|
0.1
|
|
Effect of increase in future
royalty tax on deferred tax balances
|
|
(34.3)
|
1.9
|
|
(34.3)
|
1.7
|
|
-
|
-
|
|
-
|
-
|
|
Withholding tax
|
|
(1.4)
|
0.1
|
|
(1.4)
|
0.1
|
|
(73.0)
|
4.6
|
|
(73.0)
|
2.9
|
|
Tax effect of (loss)/ profit of
associates and joint ventures
|
|
(3.6)
|
0.2
|
|
(3.6)
|
0.2
|
|
13.0
|
(0.8)
|
|
13.0
|
(0.5)
|
|
Impact of previously unrecognised
tax losses on current tax
|
|
(2.3)
|
0.1
|
|
(2.3)
|
0.1
|
|
0.2
|
-
|
|
0.2
|
0
|
|
Gain on disposal of investment in
joint venture
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
255.1
|
(10.0)
|
|
Difference in overseas tax
rates
|
|
-
|
-
|
|
3.3
|
(0.2)
|
|
-
|
-
|
|
-
|
-
|
|
Tax expense and effective tax rate for the Year
ended
|
|
(624.3)
|
34.7
|
|
(666.1)
|
33.9
|
|
(603.6)
|
37.4
|
|
(603.6)
|
23.6
|
The effective tax rate items of
34.7% varied from the statutory rate principally due to the mining
tax (royalty) (net impact of $80.2 million / 4.5% including the
deduction of the mining tax (royalty) as an allowable expense in
the determination of first category tax), the effect of the
increase in future royalty tax on deferred tax balances (impact of
$34.3 million / 1.9%), items not deductible for Chilean corporate
tax purposes, principally the funding of expenses outside of Chile
(impact of $21.4 million / 1.2%), the impact of the recognition of
the Group's share of profit from associates and joint ventures,
which are included in the Group's profit before tax net of their
respective tax charges (impact of $3.6 million / 0.2%), the impact
of unrecognised tax losses (impact of $2.3 million / 0.1%) and the
withholding tax relating to the remittance of profits from Chile
(impact of $1.4 million / 0.1%), partly offset by adjustments in
respect of prior years (impact of $4.5 million / 0.3%).
The impact of the exceptional item
on the tax charge including exceptional items was a $41.8 million
deferred tax expense. Further details of the exceptional item are
set out in Note 18.
The main factors which could
impact the sustainability of the Group's existing effective tax
rate are:
· The
impact of the new Chilean mining royalty as described
above.
· The
level of future distributions made by the Group's Chilean
subsidiaries out of Chile, which could result in increased
withholding tax charges. When determining whether it is likely that
distributions will be made in the foreseeable future, and what is
the appropriate foreseeable future period for this purpose, the
Group considers factors such as the predictability of the likely
future Group dividends, taking into account the Group's dividend
policy and the level of potential volatility of the Group's future
earnings, as well as the current level of distributable reserves at
the Antofagasta plc entity level. As noted
above, the withholding tax charge in the current period reflected a
one-off adjustment of $34.7 million to the provision for deferred
withholding tax, as a result of an intra-group restructuring of
intercompany balances.
· The
impact of expenses which are not deductible for Chilean first
category tax. Some of these expenses are fixed costs, and so the
relative impact of these expenses on the Group's effective tax rate
will vary depending on the Group's total profit before tax in a
particular year.
OECD Pillar two model rules
The Group falls within the scope
of the OECD Pillar two model rules, which will introduce a minimum
effective tax rate of 15% for multinational companies. The rules
were substantively enacted in the UK in 2023 and will be effective
from 1 January 2024. Currently, the Antofagasta Group operates in
Chile and is subject to the Chilean first category (corporate) tax
rate of 27%, plus withholding taxes on any profits distributed from
Chile. The Group is evaluating the potential future impact of these
rules on its tax expense. However, based on the Group's current
position, it does not anticipate any effect on its 2024 tax
expense. This has included analysis of the Group's detailed
financial information in respect of 2021. There have not been
changes to the Group's position or results subsequent to that date
which would significantly impact that analysis. The Group has
applied the amendment to IAS 12, which requires that companies do
not recognise deferred tax balances in relation to the Pillar two
model rules.
Minera Centinela tax claims and queries
In the context of an
administrative review, the Chilean Internal Revenue Service (IRS)
has raised claims and queries with Minera Centinela in respect of
approximately $85 million of tax deductions recognised in relation
to the amortisation of start-up costs relating to the Encuentro
pit. The Group considers the tax treatment adopted by Minera
Centinela to be correct and appropriate, has robust arguments to
support its position, and expects its position to be upheld by the
review processes. If the Group is unsuccessful in supporting its
position, this amount (plus potential interest and penalties) would
fall due.
There are no other significant tax
uncertainties which would require critical judgements, estimates or
potential provisions other than deferred tax judgements and
estimates.
10. Earnings per share
|
|
|
Year ended
31.12.2023
|
|
Year
ended 31.12.2022
|
|
|
|
$m
|
|
$m
|
|
Profit for the period attributable
to owners of the parent (excluding exceptional items)
|
|
709.8
|
|
588.3
|
|
Exceptional Items
|
|
125.3
|
|
944.7
|
|
Profit for the period attributable
to owners of the Parent (including exceptional items) from
operations
|
|
835.1
|
|
1,533.0
|
|
|
|
|
|
|
|
|
|
Number
|
|
Number
|
|
Ordinary shares in issue
throughout each year
|
|
985,856,695
|
|
985,856,695
|
|
|
|
|
|
|
|
|
|
Year ended
31.12.2023
|
|
Year
ended 31.12.2022
|
|
|
|
US cent
|
|
US
cent
|
|
Basic earnings per share
(excluding exceptional items) from operations
|
|
72.0
|
|
59.7
|
|
Basic earnings per share
(exceptional items) from operations
|
|
12.7
|
|
95.8
|
|
Basic earnings per share
(including exceptional items) from operations
|
|
84.7
|
|
155.5
|
Basic earnings per share are
calculated as profit after tax and non-controlling interests, based
on 985,856,695 (2022: 985,856,695) ordinary shares.
There was no potential dilution of
earnings per share in either year set out above, and therefore
diluted earnings per share did not differ from basic earnings per
share as disclosed above.
Reconciliation of basic earnings per
share from continuing operations:
|
|
|
Year ended
31.12.2023
|
|
Year
ended 31.12.2022
|
|
Profit for the year attributable
to owners of the parent
|
$m
|
835.1
|
|
1,533.0
|
|
Profit from continuing operations
attributable to owners of the parent
|
|
835.1
|
|
1,533.0
|
|
Ordinary shares
|
number
|
985,856,695
|
|
985,856,695
|
|
Basic earnings per share from
continuing operations
|
|
84.7
|
|
155.5
|
11. Dividends
The Board has recommended a final
dividend of 24.3 cents per ordinary share or $239.6 million in
total (2022 - 50.5 cents per ordinary share or $497.9 million in
total). The interim dividend of 11.7 cents per ordinary share or
$115.3 million in total was paid on 30 September 2023 (2022 interim
dividend of 9.2 cents per ordinary share or $90.7 million in
total). This gives total dividends proposed in relation to 2023
(including the interim dividend) of 36.0 cents per share or $354.9
million in total (2022 - 59.7 cents per share or $588.3 million in
total).
Dividends per share actually paid
in the year and recognised as a deduction from net equity under
IFRS were 62.2 cents per ordinary share or $613.2 million in total
(2022 - 128.1 cents per ordinary share or $1,262.9 million in
total) being the interim dividend for the year and the final
dividend proposed in respect of the previous year.
Further details of the currency
election timing and process (including the default currency of
payment) are available on the Antofagasta plc website
(www.antofagasta.co.uk) or from the Company's registrar,
Computershare Investor Services PLC on +44 370 702 0159.
12. Intangible assets
The intangible asset relates to
Twin Metals' mining licences assets (included within the corporate
segment). A full impairment provision was recognised in respect of
the $150.1 million cost of this asset as at 31 December 2021, as a
result of the US federal government's cancellation of certain of
Twin Metals' mining leases. Twin Metals believes it has a valid
legal right to the mining leases and a strong case to defend its
legal rights. Although the Group is pursuing validation of those
rights, considering the time and uncertainty related to any legal
action to challenge the government decisions, a full impairment
provision continues to be recognised in respect of the carrying
value of the asset.
|
|
Cost
|
|
Accumulated depreciation and
impairment
|
Net book
value
|
|
|
$m
|
|
$m
|
$m
|
|
At 1 January 2021
|
150.1
|
|
-
|
150.1
|
|
Provision against carrying
value
|
-
|
|
(150.1)
|
(150.1)
|
|
At
31 December 2021
|
150.1
|
|
(150.1)
|
-
|
|
At
31 December 2022
|
150.1
|
|
(150.1)
|
-
|
|
At
31 December 2023
|
150.1
|
|
(150.1)
|
-
|
13. Property, plant and equipment
|
|
Mining
|
Railway and other
transport
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
Balance at the beginning of the
year
|
11,247.8
|
295.7
|
11,543.5
|
10,538.5
|
|
Additions
|
2,256.4
|
51.5
|
2,307.9
|
2,002.0
|
|
Additions - depreciation
capitalised
|
90.3
|
-
|
90.3
|
73.3
|
|
Reclassifications
|
-
|
(0.4)
|
(0.4)
|
-
|
|
Capitalisation of
interest
|
112.1
|
-
|
112.1
|
49.0
|
|
Adjustment to capitalised
decommissioning provisions
|
(32.0)
|
0.1
|
(31.9)
|
173.8
|
|
Depreciation expensed in the
year
|
(1,179.6)
|
(31.7)
|
(1,211.3)
|
(1,141.1)
|
|
Depreciation capitalised in
PP&E
|
(90.3)
|
-
|
(90.3)
|
(73.3)
|
|
Net effect of depreciation
capitalised in inventories
|
(41.2)
|
-
|
(41.2)
|
(71.1)
|
|
Asset disposals
|
-
|
-
|
-
|
(7.6)
|
|
Balance at the end of the year
|
12,363.5
|
315.2
|
12,678.7
|
11,543.5
|
During the year ended 31 December
2023, the net effect of depreciation capitalised within property,
plant and equipment or inventories in respect of assets relating to
Los Pelambres, Centinela and Antucoya is $131.5 million (31
December 2022 - $144.4 million), and has accordingly been excluded
from the depreciation charge recorded in the income statement as
shown in Note 5.
At 31 December 2023, the Group had
entered into contractual commitments for the acquisition of
property, plant and equipment amounting to $982.7 million (31
December 2022 - $845.1 million).
Depreciation capitalised in
property, plant and equipment of $90.3 million related to the
depreciation of assets used in mine development (operating
stripping) at Centinela, Los Pelambres and Antucoya (31 December
2022 - $73.3 million).
14. Disposal of investment in Tethyan joint venture (Reko Diq
project)
On 15 December 2022, Antofagasta
entered into definitive agreements to exit its 50% interest in the
Tethyan joint venture, which was a joint venture with Barrick Gold
Corporation ("Barrick") in respect of the Reko Diq project in
Pakistan. Antofagasta recognised a gain on disposal of its
investment in the joint venture as at 15 December 2022 of $944.7
million. The joint venture project was held via the Australian
entity Atacama Copper Pty Limited ("Atacama"). The disposal
proceeds, which together with accrued interest up to 15 December
2022 totalled US$946.0 million, were held by Atacama in a
segregated interest-bearing account. Antofagasta and Barrick agreed
that the proceeds of this account, including all further interest
received, less any Australian tax arising and working capital and
other adjustments, would be distributed to the Antofagasta Group
during 2023, on a date to be determined by Antofagasta. Atacama was
seeking a binding private ruling from the Australian Tax Office to
confirm that the disposal proceeds and their distribution to the
Antofagasta Group would not be subject to Australian tax. In May
2023, Atacama received the binding private ruling confirming these
points. Antofagasta then requested that the disposal proceeds
including interest be distributed to the Antofagasta Group,
resulting in a total distribution of $956.3 million by Atacama to
the Antofagasta Group in May 2023.
15. Investment in associates and joint
ventures
|
|
ATI(i)
|
Minera
Zaldívar(ii)
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
Balance at the beginning of the
year
|
7.3
|
897.3
|
904.6
|
905.8
|
|
Obligations on behalf of JV and
associates at the beginning of the year
|
-
|
-
|
-
|
(0.6)
|
|
Capital contribution
|
0.6
|
-
|
0.6
|
-
|
|
Share of profit/(loss) before
tax
|
2.6
|
(1.2)
|
1.4
|
70.6
|
|
Share of tax
|
(0.7)
|
(14.2)
|
(14.9)
|
(22.5)
|
|
Share of (loss)/profit from JV and
associates
|
1.9
|
(15.4)
|
(13.5)
|
48.1
|
|
Share of other comprehensive losses
of associates and joint ventures, net of tax
|
-
|
(0.6)
|
(0.6)
|
-
|
|
Dividends received
|
-
|
-
|
-
|
(50.0)
|
|
Disposal of investment in
JV
|
-
|
-
|
-
|
1.3
|
|
Balance at the end of the year
|
9.8
|
881.3
|
891.1
|
904.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATI(i)
|
Minera
Zaldívar(ii)
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
|
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Net share of (loss)/profit of
associates and joint ventures
|
1.9
|
(15.4)
|
(13.5)
|
48.1
|
The investments which are included
in the $891.1 million balance at 31 December 2023 are set out
below:
Investment in associates
(i)
The Group's 30% interest in Antofagasta Terminal Internacional
("ATI"), which operates a concession to manage installations in the
port of Antofagasta.
Investment in joint ventures
(ii)
The Group's 50% interest in Minera Zaldívar SpA
("Zaldívar").
Summarised financial information for
the associates at December 2023 is as follows:
|
|
ATI
|
ATI
|
|
|
31.12.2023
|
31.12.2022
|
|
|
$m
|
$m
|
|
Cash and cash equivalents
|
5.9
|
0.4
|
|
Current assets
|
21.6
|
18.6
|
|
Non-current assets
|
84.3
|
91.8
|
|
Current liabilities
|
(13.6)
|
(19.3)
|
|
Non-current liabilities
|
(62.1)
|
(69.5)
|
|
Revenue
|
65.9
|
55.2
|
|
Profit from continuing
operations
|
6.2
|
5.1
|
|
Total comprehensive
income
|
6.2
|
5.1
|
Summarised financial information
for the joint ventures at December 2023 is as follows:
|
|
Minera
Zaldívar
|
Minera
Zaldívar
|
|
|
31.12.2023
|
31.12.2022
|
|
|
$m
|
$m
|
|
Cash and cash equivalents
|
38.4
|
70.1
|
|
Current
assets1
|
664.5
|
661.8
|
|
Non-current assets
|
1,628.6
|
1,658.6
|
|
Current financial liabilities (excl.
trade, other payables and provisions)
|
(57.8)
|
(53.2)
|
|
Current liabilities
|
(171.3)
|
(159.3)
|
|
Non-current financial liabilities
(excl. trade, other payables and provisions)
|
(10.8)
|
(68.3)
|
|
Non-current liabilities
|
(230.0)
|
(203.3)
|
|
Revenue
|
718.6
|
783.4
|
|
Depreciation
|
(164.4)
|
(149.2)
|
|
Interest income
|
2.0
|
1.5
|
|
Interest expense
|
(11.3)
|
(0.8)
|
|
Income tax expense or
income
|
(28.4)
|
(43.9)
|
|
(Loss)/profit after tax from
continuing operations
|
(2.1)
|
94.6
|
|
Total comprehensive
(expense)/income
|
(2.1)
|
94.6
|
1 The current assets includes cash and cash
equivalents.
The above summarised financial
information is based on the amounts included in the IFRS financial
statements of the associate or joint venture (100% of the results
or balances of the associate or joint venture, rather than the
Group's proportionate share), after the Group's fair value
adjustments and applying the Group's accounting
policies.
16. Equity investments
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
|
Balance at the beginning of the
year
|
90.5
|
8.7
|
|
Acquisition
|
60.7
|
66.5
|
|
Movements in fair
value1
|
137.0
|
15.8
|
|
Foreign currency exchange
difference
|
0.4
|
(0.5)
|
|
Balance at the end of the year
|
288.6
|
90.5
|
1 A deferred tax expense of $37.0 million has been recognised
in respect of the movements in the fair value of equity investments
(pre-tax gain of $137.0 million), resulting in a post-tax gain of
$100.0 million (see Note 22).
Equity
investments represent those investments which are not subsidiaries,
associates or joint ventures and are not held for trading purposes.
The fair value of all equity investments are based on quoted market
prices.
Of the
total equity investment balance at 31 December 2023, $275.2 million
relates to a holding of approximately 18.2 million shares in
Compañia de Minas Buenaventura S.A.A. ("Buenaventura"),
representing approximately 7% of Buenaventura's issued share
capital. As detailed in Note 3, the Group has entered into an
agreement under which it is expected to acquire an additional
holding of up to 30 million shares in Buenaventura, representing
approximately 12% of Buenaventura's issued share
capital.
17. Inventories
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
$m
|
$m
|
|
Current:
|
|
|
|
|
|
Raw materials and
consumables
|
|
|
231.0
|
221.4
|
|
Work in progress
|
|
|
375.4
|
404.9
|
|
Finished goods
|
|
|
64.6
|
81.8
|
|
|
|
|
671.0
|
708.1
|
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
Work in progress
|
|
|
457.0
|
347.0
|
|
|
|
|
|
|
|
Total current and non-current
inventories
|
|
|
1,128.0
|
1,055.1
|
During 2023, net realisable value
("NRV") adjustments of $6.0 million have been recognised (2022:
nil). Non-current work-in-progress represents inventory expected to
be processed more than 12 months after the balance sheet
date.
18. Other financial asset
Compañia de Minas Buenaventura
S.A.A.
The Group has entered into an
agreement under which it is expected to acquire up to an additional
30 million shares in Compañia de Minas Buenaventura S.A.A.
("Buenaventura"), representing approximately 12% of Buenaventura's
issued share capital. Buenaventura is Peru's largest, publicly
traded precious and base metals company and a major holder of
mining rights in Peru. As at 31 December 2023, an "other financial
asset" balance has been recognised on the balance sheet in respect
of the agreement, at its fair value of $457.2 million. A fair value
gain of $167.1 million has been recognised during 2023 in respect
of this asset. As detailed in Note 16, as at 31 December 2023 the
Group held an existing holding of approximately 18.2 million shares
in Buenaventura, representing approximately 7% of Buenaventura's
issued share capital.
19. Borrowings and other financial
liabilities
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
$m
|
$m
|
|
Los
Pelambres
|
|
|
|
|
Senior loan
|
(i)
|
(2,067.2)
|
(1,470.5)
|
|
Leases
|
|
(45.2)
|
(55.3)
|
|
Centinela
|
|
|
|
|
Senior loan
|
(ii)
|
(431.3)
|
(276.7)
|
|
Leases
|
|
(142.8)
|
(35.2)
|
|
Antucoya
|
|
|
|
|
Senior loan
|
(iii)
|
(174.1)
|
(223.5)
|
|
Subordinated debt
|
(iv)
|
(187.6)
|
(171.5)
|
|
Leases
|
(v)
|
(17.4)
|
(16.5)
|
|
Corporate and other items
|
|
|
|
|
Bonds
|
(vi)
|
(986.8)
|
(985.3)
|
|
Leases
|
(vii)
|
(18.4)
|
(23.1)
|
|
Railway and other transport services
|
|
|
|
|
Senior loan
|
(viii)
|
(5.0)
|
(15.3)
|
|
Leases
|
|
(0.9)
|
(1.6)
|
|
Preference shares
|
(ix)
|
(2.5)
|
(2.5)
|
|
Total
|
|
(4,079.2)
|
(3,277.0)
|
(i)The senior loan at Los
Pelambres represents:
· a
$1,280 million US dollar denominated syndicated loan divided in
three tranches. The first tranche has a remaining duration of 2
years and has an interest rate of Term SOFR six-month rate plus an
all-in margin of 1.48%. The second tranche has a remaining duration
of 5 years and has an interest rate of Term SOFR six-month rate
plus an all-in margin of 1.28%. The third tranche has a remaining
duration of 4.5 years and has an interest rate of Term SOFR
six-month rate plus an all-in margin of 1.53%. The loans are
subject to financial covenants which require that specified net
debt to EBITDA and EBITDA to finance expense ratios are
maintained.
· three US dollar denominated senior loans issued in December
2023 for a total amount of $810 million. The first loan for $200
million is a 3 years bullet and an interest rate of Term SOFR
six-month rate plus 1.60%. The second loan is also a bullet for
$200 million has a remaining duration of 5 years and an interest
rate of Term SOFR six-month rate plus 1.69%. And the third loan for
$410 million has a remaining duration of 5 years, amortizing, and
an interest rate of Term SOFR six-month rate plus 1.70%.
(ii) Centinela has a US dollar denominated senior loan with an amount
outstanding of $167 million with a duration of 1.5 years and an
interest rate of Term SOFR six-month rate plus an all-in margin of
1.38%. The loan is subject to financial covenants which
require that specified net debt to EBITDA and EBITDA to finance
expense ratios are maintained. In July 2023, Centinela issued two
short term loans for a total amount of $265 million and a remaining
duration of 0.5 years.
(iii) The senior loan at Antucoya
represents a US dollar denominated syndicated loan with an amount
outstanding of US$175 million. This loan has a remaining duration
of 3.5 years and has an interest rate of Term SOFR six-month rate
plus 1.40%. The loan is subject to financial covenants which
require that specified net debt to EBITDA and EBITDA to finance
expense ratios are maintained.
(iv) Subordinated debt at Antucoya
is US dollar denominated, provided to Antucoya by Marubeni
Corporate with a remaining duration of 3.5 years and an interest
rate of Term SOFR six-month rate plus an all-in margin of 4.08%.
Subordinated debt provided by Group companies to Antucoya has been
eliminated on consolidation.
(v) Financial Leases at Antucoya
are denominated in US dollars with an average interest rate of Term
SOFR six-month rate plus 2.4% and a remaining duration of 0.5
years.
(vi) Antofagasta plc in October
2020 issued a corporate bond for $500 million with a 10 years tenor
with a base spread of Treasuries plus 165 bps and a coupon of
2.375%. In May 2022, Antofagasta plc issued a new corporate bond
for $500 million with a 10 years tenor with a base spread of
Treasuries plus 287.5 bps and a coupon of 5.625%.
(vii) Financial Leases at
Corporate and other items are denominated in Unidades de Fomento
(ie inflation-linked Chilean pesos) and have a remaining duration
of 3.0 years and are at fixed rates with an average interest rate
of 5.2%.
(viii) Short-term loans at The
Transport division are US dollar denominated, with an outstanding
amount of $5 million and remaining duration of 0.1 years and
an interest rate of Term SOFR six-month rate plus an all-in margin
of 1.49%.
(ix) The preference shares are
Sterling-denominated and issued by Antofagasta plc. There are 2
million shares of £1 each authorised, issued and fully paid. The
preference shares are non-redeemable and are entitled to a fixed
cumulative dividend of 5% per annum. On winding up, they are
entitled to repayment and any arrears of dividend in priority to
ordinary shareholders but are not entitled to participate further
in any surplus. Each preference share carries 100 votes in any
general meeting of the Company.
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
|
Short-term borrowings
|
(901.9)
|
(432.5)
|
|
Medium and long-term
borrowings
|
(3,177.3)
|
(2,844.5)
|
|
Total
|
(4,079.2)
|
(3,277.0)
|
At 31 December 2023, $1,219.0
million (31 December 2022 - $1,129.0 million) of the borrowings has
fixed rate interest and $2,860.2 million (December 2022 - $2,148.0
million) has floating rate interest.
On 30 December, 2022, Antofagasta
plc agreed a revolving credit facility "RCF" of $500.0 million.
This revolving credit facility has a term of three years, which
expires on 30 December, 2025.
The facility remained undrawn
throughout the year 2023.
|
|
Facility
available
|
|
Drawn
|
|
Undrawn
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
$m
|
$m
|
|
$m
|
$m
|
|
$m
|
$m
|
|
Revolving credit facility
|
(500.0)
|
(500.0)
|
|
-
|
-
|
|
(500.0)
|
(500.0)
|
20. Post-employment benefit obligations
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
$m
|
$m
|
|
Balance at the beginning of the
year
|
|
|
(137.3)
|
(107.5)
|
|
Current service cost
|
|
|
(25.7)
|
(19.1)
|
|
Unwinding of discount on
provisions
|
|
|
(7.2)
|
(6.8)
|
|
Actuarial gains/(losses)
|
|
|
10.7
|
(18.1)
|
|
Paid in the year
|
|
|
16.0
|
12.7
|
|
Foreign currency exchange
difference
|
|
|
3.6
|
1.5
|
|
Balance at the end of the year
|
|
|
(139.9)
|
(137.3)
|
The post-employment benefit
obligation relates to the provision for severance indemnities which
are payable when an employment contract comes to an end, in
accordance with normal employment practice in Chile and other
countries in which the Group operates. The severance
indemnity obligation is treated as an unfunded defined benefit
plan, and the calculation is based on valuations performed by an
independent actuary.
21. Decommissioning and restoration
provisions
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
$m
|
$m
|
|
Balance at the beginning of the
year
|
|
|
(488.2)
|
(336.1)
|
|
Charge to operating profit in the
year
|
|
|
(12.8)
|
(15.4)
|
|
Unwinding of discount to net
interest in the year
|
|
|
(10.2)
|
(10.1)
|
|
Adjustment to provision discount
rates
|
|
|
1.6
|
(1.6)
|
|
Capitalised adjustment to
provision
|
|
|
31.9
|
(173.8)
|
|
Utilised in the year
|
|
|
36.8
|
49.7
|
|
Foreign currency exchange
difference
|
|
|
(0.2)
|
(0.9)
|
|
Balance at the end of the year
|
|
|
(441.1)
|
(488.2)
|
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
$m
|
$m
|
|
Short-term provisions
|
|
|
(15.2)
|
(33.2)
|
|
Long-term provisions
|
|
|
(425.9)
|
(455.0)
|
|
Total
|
|
|
(441.1)
|
(488.2)
|
Decommissioning and restoration
costs relate to the Group's mining operations. Costs are estimated
on the basis of a formal closure plan and are subject to regular
independent formal review by Sernageomin, the Chilean government
agency which regulates the mining industry in Chile. During 2023,
the Centinela provisions were updated to reflect new plans approved
by Sernageomin during the year. The provision balance
reflects the present value of the forecast future cash flows
expected to be incurred in line with the closure plans, discounted
using Chilean real interest rates with durations corresponding with
the timings of the closure activities. At 31 December 2023, the
real discount rates ranged from 2.29% to 2.41% (31 December 2022:
1.67% to 1.73%).
It is estimated that the provision
will be utilised from 2024 until 2066 based on current mine plans,
with approximately 16% of the total provision balance expected to
be utilised between 2024 and 2033, approximately 48% between 2034
and 2043, approximately 9% between 2044 and 2053 and approximately
27% between 2054 and 2066.
Given the long-term nature of these
balances, it is possible that future climate risks could impact the
appropriate amount of these provisions, both in terms of the nature
of the decommissioning and site rehabilitation activities that are
required, or the costs of undertaking those activities. In its
Annual Report and Accounts, the Group
discloses in line with the recommendations of the Task Force on
Climate-related Financial Disclosures ("TCFD"). This process
included scenario analyses assessing the impact of transition and
physical risks. As a simple high-level sensitivity, we have
considered whether the level of estimated costs relating to the
potential future risks identified under the scenario analysis could
indicate a general level of future cost increases as a consequence
of climate risks which could indicate a significant potential
impact on these provision balances. This analysis did not indicate
a significant potential impact on the decommissioning and
restoration provision balances. However, more detailed specific
analysis of the potential impacts of climate risks in future
periods could result in adjustments to these provision balances.
When future updates to the closure plans are prepared and submitted
to Sernageomin for review and approval, it is possible that
additional consideration of potential climate risk impacts may need
to be incorporated into the plan assumptions. In addition,
Sernageomin may introduce new regulations or guidance in respect of
climate risks which may need to be addressed in future updates to
the Group's closure plans.
22. Deferred tax assets and liabilities
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
$m
|
$m
|
|
Net deferred tax position at the
beginning of the year
|
|
(1,464.8)
|
(1,315.7)
|
|
Charge to tax on profit in
year
|
|
|
(37.5)
|
(154.8)
|
|
Deferred tax recognised directly in
equity1
|
|
|
(40.8)
|
5.7
|
|
Tax on exceptional items
2
|
|
|
(41.8)
|
-
|
|
Exchange differences
|
|
|
0.3
|
-
|
|
Net deferred tax position at the end
of the year
|
|
|
(1,584.6)
|
(1,464.8)
|
|
|
|
|
|
|
|
Analysed between:
|
|
|
|
|
|
Net deferred tax assets
|
|
|
72.0
|
78.5
|
|
Net deferred tax
liabilities
|
|
|
(1,656.6)
|
(1,543.3)
|
|
Net deferred tax position
|
|
|
(1,584.6)
|
(1,464.8)
|
1 The $40.8 million of deferred tax recognised directly in
equity relates to a $37.0m deferred tax expense in respect of the
movements in the fair value of equity investments (see Note 16) and
a $3.8 million deferred tax expense in respect of actuarial gains
on defined benefit plans.
2 A deferred tax expense of $41.8
million has been recognised in respect of the exceptional fair
value gain of $167.1 million in respect of the agreement under
which the Group is expected to acquire up to an additional 30
million shares in Compañia de Minas Buenaventura S.A.A. (see Note
3).
The $72.0 million net deferred tax
asset balance (2022 - $78.5 million) relates to the total deferred
tax position of those individual Group entities which have a net
deferred tax asset position. In general, these net deferred tax
asset positions reflect tax losses, which in some cases are partly
offset by deferred tax liabilities in respect of accelerated
capital allowances and other temporary differences.
At 31 December 2023, the Group had
unused tax losses associated with Chilean entities (predominantly
Antucoya) of $523.3 million (2022 - $460.3 million) available for
offset against future profits. Generally under Chilean tax law,
most tax losses can be carried forward indefinitely. A deferred tax
asset of $141.2 million has been recognised in respect of 100% of
these losses as at 31 December 2023 (31 December 2022 - $124.5
million). In addition, at 31 December 2023, the Group had unused
tax losses associated with entities outside of Chile (predominantly
in respect of the Twin Metals project) of $496.8 million (2022 -
$427.0 million)). A portion of the Twin Metals tax losses expire in
the period from 2030 - 2037, and the remainder can be carried
forward indefinitely. Deferred tax assets have not been recognised
in respect of these tax losses, reflecting the fact that the
relevant entities have generated taxable losses in recent
years.
At 31 December 2023, deferred
withholding tax liabilities of $66.6 million have been recognised
(31 December 2022 - $71.6 million) which relate to undistributed
earnings of subsidiaries where it is considered likely that the
corresponding profits will be distributed in the foreseeable
future. The value of the remaining undistributed earnings of
subsidiaries, for which deferred tax liabilities have not been
recognised, because the Group is in a position to control the
timing of the distributions and it is likely that distributions
will not be made in the foreseeable future, was $7,101.1 million
(31 December 2022 - $6,430.4 million). If deferred withholding tax
liabilities were recognised in respect of all of these remaining
undistributed earnings of subsidiaries this would result in an
additional deferred tax liability and expense of approximately
$1,314.9 million (31 December 2022 - $1,076.5 million), depending
on the application of tax credits which may be available in
particular circumstances.
Temporary differences arising in
connection with interests in associates are
insignificant.
The deferred tax balance of
$1,584.6 million (2022 - $1,464.8 million) includes $1,495.2
million (2022 - $1,404.7 million) due in more than one
year.
All amounts are shown as
non-current on the face of the balance sheet as required by IAS 12
Income Taxes.
23. Share capital and share premium
There was no change in share
capital or share premium in the year ended 2023 or 2022. Details
are shown in the Consolidated Statement of Changes in
Equity.
24. Other reserves and retained earnings
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
$m
|
$m
|
|
Equity investment revaluation reserve
(1)
|
|
|
|
|
At 1 January
|
|
8.4
|
(7.4)
|
|
Gains on equity
investment
|
|
100.0
|
15.8
|
|
At
31 December
|
|
108.4
|
8.4
|
|
Foreign currency translation reserve
(2)
|
|
|
|
|
At 1 January
|
|
(3.4)
|
(3.0)
|
|
Currency translation
adjustment
|
|
(0.5)
|
(0.4)
|
|
At
31 December
|
|
(3.9)
|
(3.4)
|
|
Total other reserves per balance sheet
|
|
104.5
|
5.0
|
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
At
1 January
|
|
8,333.5
|
8,071.6
|
|
Parent and subsidiaries' profit for
the year
|
|
848.6
|
1,484.9
|
|
Equity accounted units'
(loss)/profit after tax for the year
|
|
(13.5)
|
48.1
|
|
Actuarial gains/(losses)
(3)
|
|
3.0
|
(8.2)
|
|
Total comprehensive income for the year
|
|
838.1
|
1,524.8
|
|
Dividends paid
|
|
(613.2)
|
(1,262.9)
|
|
At
31 December
|
|
8,558.4
|
8,333.5
|
(1) The equity investment
revaluation reserves record fair value gains or losses relating to
equity investments, as described in Note 16.
(2) Exchange differences arising
on the translation of the Group's net investment in
foreign-controlled companies are taken to the foreign currency
translation reserve.
(3) Actuarial gains or losses relate to long-term employee
benefits, as described in Note 20.
25. Reconciliation of profit before tax to cash inflow from
operating activities
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Profit before tax
|
1,965.5
|
2,558.9
|
|
Depreciation
|
1,211.3
|
1,141.1
|
|
Net loss on disposals
|
-
|
2.1
|
|
Net finance (income)/expense -
excluding exceptional items
|
(29.1)
|
68.2
|
|
Share of loss/(profit) of associates
and joint ventures
|
13.5
|
(48.1)
|
|
Exceptional fair value gain in
respect of other financial asset
|
(167.1)
|
-
|
|
Gain on disposal of investment in
joint venture
|
-
|
(944.7)
|
|
Increase in inventories
|
(31.6)
|
(180.7)
|
|
(Increase)/decrease in
debtors
|
(57.9)
|
27.0
|
|
Increase in creditors
|
137.0
|
141.0
|
|
Decrease in provisions
|
(14.5)
|
(26.5)
|
|
Cash flow generated from operations
|
3,027.1
|
2,738.3
|
26. Analysis of changes in net debt
|
|
At
31.12.2022
|
Cash
flows
|
Fair
value gains
|
New
leases
|
Amortisation of finance costs
|
Capitalisation of interest
|
Other
|
Reclassification
|
Foreign
exchange
|
At
31.12.2023
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
810.4
|
(162.0)
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.7)
|
644.7
|
|
Liquid investments
|
1,580.8
|
674.2
|
19.7
|
-
|
-
|
-
|
-
|
-
|
-
|
2,274.7
|
|
Total
|
2,391.2
|
512.2
|
19.7
|
-
|
-
|
-
|
-
|
-
|
(3.7)
|
2,919.4
|
|
Borrowings due within one
year
|
(377.4)
|
116.7
|
-
|
-
|
-
|
-
|
-
|
(533.4)
|
-
|
(794.1)
|
|
Borrowings due after one
year
|
(2,765.4)
|
(797.2)
|
-
|
-
|
(12.7)
|
(16.0)
|
-
|
533.4
|
-
|
(3,057.9)
|
|
Leases due within one
year
|
(55.1)
|
81.2
|
-
|
-
|
-
|
-
|
-
|
(133.9)
|
-
|
(107.8)
|
|
Leases due after one year
|
(76.6)
|
-
|
-
|
(178.6)
|
-
|
-
|
-
|
133.9
|
4.4
|
(116.9)
|
|
Preference shares
|
(2.5)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2.5)
|
|
Total borrowings
|
(3,277.0)
|
(599.3)
|
-
|
(178.6)
|
(12.7)
|
(16.0)
|
-
|
-
|
4.4
|
(4,079.2)
|
|
Net
debt
|
(885.8)
|
(87.1)
|
19.7
|
(178.6)
|
(12.7)
|
(16.0)
|
-
|
-
|
0.7
|
(1,159.8)
|
Net
debt
Net debt at the end of each period
was as follows:
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
$m
|
$m
|
|
Cash, cash equivalents and liquid
investments
|
2,919.4
|
2,391.2
|
|
Total borrowings and other financial
liabilities
|
(4,079.2)
|
(3,277.0)
|
|
Net
debt
|
(1,159.8)
|
(885.8)
|
27. Related party transactions
Transactions between the Company
and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
Transactions between the Group and its associates and joint
ventures are disclosed below.
The transactions which Group
companies entered into with related parties who are not members of
the Group are set out below. There are no guarantees given or
received and no provisions for doubtful debts related to the amount
of outstanding balances.
a)
Quiñenco SA
Quiñenco SA ("Quiñenco") is a
Chilean financial and industrial conglomerate, the shares of which
are traded on the Santiago Stock Exchange. The Group and Quiñenco
are both under the control of the Luksic family, and two Directors
of the Company, Jean-Paul Luksic and Andronico Luksic, who are also
directors of Quiñenco.
The following transactions took
place between the Group and the Quiñenco group of companies, all of
which were on normal commercial terms at market rates:
-
the Group earned interest income of $0.9 million (2022 - $0.8
million) during the year on investments with BanChile AGF, a
subsidiary of Quiñenco. Investment balances at the end of the year
were nil (2022: nil).
-
the Group made purchases of fuel from ENEX SA, a subsidiary of
Quiñenco, of $337.8 million (2022 - $309.9 million). The balance
due to ENEX SA at the end of the year was $13.3 million (2022 -
$28.6 million).
-
the Group purchased shipping services from Hapag Lloyd, an
associate of Quiñenco, for $9.0 million (2022 - $12.7 million). The
balance due to Hapag Lloyd at the end of the year was nil (2022
-$0.3 million).
-
the Group made purchases of technology services from ARTIKOS CHILE
SA, a subsidiary of Quiñenco, of $0.2 million (2022 - $0.2
million). The balance due to ARTIKOS CHILE SA at the end of the
year was nil (2022: nil).
b)
Compañía de Inversiones Adriático SA
In 2023, the Group leased office
space on normal commercial terms from Compañía de Inversiones
Adriático SA, a company in which members of the Luksic family have
an interest, at a cost of $0.8 million (2022 - $0.4
million)
c)
Antomin 2 Limited and Antomin Investors Limited
The Group holds a 51% interest in
Antomin 2 Limited ("Antomin 2") and Antomin Investors Limited
("Antomin Investors"), which own a number of copper exploration
properties. The Group originally acquired its 51% interest in these
properties for a nominal consideration from Mineralinvest
Establishment, which continues to hold the remaining 49% of Antomin
2 and Antomin Investors. Mineralinvest is owned by the E. Abaroa
Foundation, in which members of the Luksic family have an interest.
During 2023, the Group incurred $0.1 million (2022- $0.1 million)
of exploration costs at these properties.
d)
Tethyan Copper Company Limited (Reko Diq project)
On 15 December 2022, Antofagasta
entered into definitive agreements to exit its interest in the
Tethyan joint venture, which was a joint
venture with Barrick Gold Corporation in respect of the Reko Diq
project in Pakistan, which is therefore no
longer recognised as a joint venture by the Group. The group
contributed nil (2022: nil) to Tethyan during 2023.
e)
Compañía Minera Zaldívar SpA
The Group has a 50% interest in
Zaldívar, which is a joint venture with Barrick Gold Corporation.
Antofagasta is the operator of Zaldívar. The balance due from
Zaldívar to group companies at the end of the year was $6.7 million
(2022 - $6.7 million). During 2023, Zaldívar declared dividends of
nil to the Group (2022 - $50.0 million).
28. Litigation and contingent liabilities
The Group is subject from time to
time to legal proceedings, claims, complaints and investigations
arising out of the ordinary course of business. The Group cannot
predict the outcome of individual legal actions or claims or
complaints or investigations. As a result, the Group may become
subject to liabilities that could affect our business, financial
position and reputation. Litigation is inherently unpredictable and
large judgement may at times occur. The Group may incur, in the
future, judgements or enter into settlements of claims that could
lead to material cash outflows. The Group considers that no
material loss to the Group is expected to result from the legal
proceedings, claims, complaints and investigations that the Group
is currently subject to. Provisions are recognised when it is
probable that the Group will be required to settle an obligation
arising as a result of a legal claim against the Group.
Details of any significant
potential tax uncertainties are set out in Note 9.
29. Currency translation
Assets and liabilities denominated
in foreign currencies are translated into US dollars and sterling
at the year-end rates of exchange. Results denominated in foreign
currencies have been translated into US dollars at the average rate
for each year.
|
|
2023
|
2022
|
|
Year-end
rate
|
$1
$1.275=£1; $1 = Ch$877.17
|
$1
$1.208=£1; $1 = Ch$855.9h$844.7
|
|
Average
rates
|
h$7$1.244=£1; $1 = Ch$839.28
|
h$7$1.234=£1; $1 = Ch$872.48
|
30. Distribution
The
Annual Report and Financial Statements for the year ended 31
December 2023, once finalised, together with the Notice of the 2024
Annual General Meeting, will be posted to all shareholders in April
2024.
Alternative performance measures (not subject to audit or
review)
This consolidated financial
information includes a number of alternative performance measures,
in addition to amounts in accordance with UK-adopted International
Accounting Standards. These measures are included because they are
considered to provide relevant and useful additional information to
users of the accounts. Set out below are definitions of these
alternative performance measures, explanations as to why they are
considered to be relevant and useful, and reconciliations to the
IFRS figures.
a) Underlying earnings per
share
Underlying earnings per share is
earnings per share from continuing operations, excluding
exceptional items. This measure is reconciled to earnings per share
from continuing operations (including exceptional items) on the
face of the income statement. This measure is considered to be
useful as it provides an indication of the earnings generated by
the ongoing businesses of the Group, excluding the impact of
exceptional items which are irregular or non-operating in
nature.
b) EBITDA
EBITDA refers to Earnings Before
Interest, Tax, Depreciation and Amortisation. EBITDA is calculated
by adding back depreciation, amortisation, profit or loss on
disposals and impairment charges to operating profit. This
comprises 100% of the EBITDA from the Group´s subsidiaries, and the
Group´s proportional share of the EBITDA of its associates and
joint ventures.
EBITDA is considered to provide a
useful and comparable indication of the current operational
earnings performance of the business, excluding the impact of the
historical cost of property, plant & equipment or the
particular financing structure adopted by the business.
For the year ended 31 December 2023
|
|
Los
Pelambres
|
Centinela
|
Antucoya
|
Zaldívar
|
Exploration and evaluation
|
Corporate and other items
|
Mining
|
Railway and other transport
services
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
1,406.0
|
491.7
|
105.7
|
-
|
(141.1)
|
(123.0)
|
1,739.3
|
43.5
|
1,782.8
|
|
Depreciation
|
318.6
|
727.3
|
109.4
|
-
|
-
|
24.3
|
1,179.6
|
31.7
|
1,211.3
|
|
EBITDA from subsidiaries
|
1,724.6
|
1,219.0
|
215.1
|
-
|
(141.1)
|
(98.7)
|
2,918.9
|
75.2
|
2,994.1
|
|
Proportional share of the EBITDA
from associates and JVs
|
-
|
-
|
-
|
86.8
|
-
|
-
|
86.8
|
6.3
|
93.1
|
|
EBITDA
|
1,724.6
|
1,219.0
|
215.1
|
86.8
|
(141.1)
|
(98.7)
|
3,005.7
|
81.5
|
3,087.2
|
For the year ended 31 December 2022
|
|
Los
Pelambres
|
Centinela
|
Antucoya
|
Zaldívar
|
Exploration and evaluation
|
Corporate and other items
|
Mining
|
Railway and other transport
services
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
1,196.2
|
446.0
|
155.6
|
-
|
(113.0)
|
(94.3)
|
1,590.5
|
43.8
|
1,634.3
|
|
Depreciation
|
276.1
|
710.2
|
105.6
|
-
|
-
|
18.7
|
1,110.6
|
30.5
|
1,141.1
|
|
Loss on disposals
|
0.5
|
1.0
|
-
|
-
|
-
|
0.6
|
2.1
|
-
|
2.1
|
|
EBITDA from subsidiaries
|
1,472.8
|
1,157.2
|
261.2
|
-
|
(113.0)
|
(75.0)
|
2,703.2
|
74.3
|
2,777.5
|
|
Proportional share of the EBITDA
from associates and JVs
|
-
|
-
|
-
|
147.2
|
-
|
(0.7)
|
146.5
|
5.7
|
152.2
|
|
Total EBITDA
|
1,472.8
|
1,157.2
|
261.2
|
147.2
|
(113.0)
|
(75.7)
|
2,849.7
|
80.0
|
2,929.7
|
c) Cash costs
Cash costs are a measure of the
cost of operational production expressed in terms of cents per
pound of payable copper produced.
This is considered to be a useful
and relevant measure as it is a standard industry measure applied
by most major copper mining companies which reflects the direct
costs involved in producing each pound of copper. It therefore
allows a straightforward comparison of the unit production cost of
different mines, and allows an assessment of the position of a mine
on the industry cost curve. It also provides a simple indication of
the profitability of a mine when compared against the price of
copper (per lb).
With sales of concentrates at Los
Pelambres and Centinela, which are sold to smelters and roasting
plants for further processing into fully refined metal, the price
of the concentrate invoiced to the customer reflects the market
value of the fully refined metal less a "treatment and refining
charge" deduction, to reflect the lower value of this partially
processed material compared with the fully refined metal. For
accounting purposes, the revenue amount is the net of the market
value of fully refined metal less the treatment and refining
charges. Under the standard industry definition of cash costs,
treatment and refining charges are regarded as an expense and part
of the total cash cost figure.
|
|
At
31.12.2023
|
At
31.12.2022
|
|
|
|
|
|
Reconciliation of cash costs excluding treatment &
refining charges and by-product revenue:
|
|
|
|
Total Group operating costs (Note 5)
($m)
|
4,541.7
|
4,227.7
|
|
Zaldívar operating costs
(attributable basis - 50%)
|
263.1
|
234.4
|
|
Less:
|
|
|
|
Depreciation Note 5) ($m)
|
(1,211.3)
|
(1,141.1)
|
|
Loss on disposal (Note 5)
($m)
|
-
|
(2.1)
|
|
Corporate and other items - Total
operating cost, excluding depreciation (Note 5) ($m)
|
(98.7)
|
(75.0)
|
|
Exploration and evaluation - Total
operating cost, excluding depreciation (Note 5) ($m)
|
(141.1)
|
(113.0)
|
|
Transport division - Total operating
cost, excluding depreciation (Note 5) ($m)
|
(120.7)
|
(119.1)
|
|
Closure provision and other expenses
not included within cash costs ($m)
|
(102.7)
|
(97.6)
|
|
Inventories variation
|
(13.6)
|
(12.0)
|
|
|
|
|
|
Total cost relevant to the mining
operations' cash costs ($m)
|
3,116.7
|
2,902.2
|
|
|
|
|
|
Copper production volumes
(tonnes)1
|
660,600
|
646,200
|
|
|
|
|
|
Cash costs excluding treatment &
refining charges and by-product revenue ($/tonne)
|
4,718
|
4,491
|
|
|
|
|
|
Cash costs excluding treatment &
refining charges and by-product revenue ($/lb)
|
2.14
|
2.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Reconciliation of cash costs before deducting by-products
revenue:
|
|
|
|
Treatment & refining charges -
copper and by-products- Los Pelambres ($m)
|
155.3
|
108.5
|
|
Treatment & refining charges -
copper and by-products- Centinela ($m)
|
95.4
|
78.8
|
|
Treatment & refining charges -
copper - total($m)
|
250.7
|
187.3
|
|
|
|
|
|
Copper production volumes
(tonnes)
|
660,600
|
646,200
|
|
|
|
|
|
Treatment & refining charges
($/tonne)
|
379.4
|
289.9
|
|
Treatment & refining charges
($/lb)
|
0.17
|
0.14
|
|
|
|
|
|
Cash costs excluding treatment &
refining charges and by-product revenue ($/lb)
|
2.14
|
2.05
|
|
Treatment & refining charges
($/lb)
|
0.17
|
0.14
|
|
Cash costs before deducting
by-product revenue (S/lb)
|
2.31
|
2.19
|
1The 660,600 tonnes includes 40,500
tonnes of production at Zaldívar on a 50% attributable
basis.
|
|
At
31.12.2023
|
At
31.12.2022
|
|
Reconciliation of cash costs (net of by-product
revenue):
|
|
|
|
Gold revenue - Los Pelambres
($m)
|
83.6
|
75.5
|
|
Gold revenue - Centinela
($m)
|
324.2
|
239.0
|
|
Molybdenum revenue - Los Pelambres
($m)
|
397.6
|
311.9
|
|
Molybdenum revenue - Centinela
($m)
|
141.7
|
110.2
|
|
Silver revenue - Los Pelambres
($m)
|
36.2
|
33.1
|
|
Silver revenue - Centinela
($m)
|
34.9
|
25.1
|
|
Total by-product revenue
($m)
|
1,018.2
|
794.8
|
|
|
|
|
|
Copper production volumes
(tonnes)2
|
660,600
|
646,200
|
|
|
|
|
|
By-product revenue
($/tonne)
|
1,541.3
|
1,230.0
|
|
By-product revenue ($/lb)
|
0.70
|
0.58
|
|
|
|
|
|
Cash costs before deducting
by-product revenue (S/lb)
|
2.31
|
2.19
|
|
By-product revenue ($/lb)
|
(0.70)
|
(0.58)
|
|
Cash costs (net of by-product
revenue) ($/lb)
|
1.61
|
1.61
|
2The 660,600 tonnes includes 40,500
tonnes of production at Zaldívar on a 50% attributable
basis.
d) Attributable cash, cash
equivalents & liquid investments, borrowings and net
debt
Attributable cash, cash
equivalents & liquid investments, borrowings and net debt
reflects the proportion of those balances which are attributable to
the equity holders of the Company, after deducting the proportion
attributable to the non-controlling interests in the Group's
subsidiaries.
This is considered to be a useful
and relevant measure as the majority of the Group's cash tends to
be held at the corporate level and therefore 100% attributable to
the equity holders of the Company, whereas the majority of the
Group's borrowings tend to be at the level of the individual
operations, and hence only a proportion is attributable to the
equity holders of the Company.
|
|
|
December
2023
|
|
|
|
December
2022
|
|
|
|
Total
amount
|
Attributable
share
|
Attributable
amount
|
|
Total
amount
|
Attributable share
|
Attributable
amount
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Cash, cash equivalents and liquid
investments:
|
|
|
|
|
|
|
|
|
Los Pelambres
|
587.0
|
60%
|
352.2
|
|
655.4
|
60%
|
393.2
|
|
Centinela
|
516.9
|
70%
|
361.8
|
|
348.5
|
70%
|
244.0
|
|
Antucoya
|
129.9
|
70%
|
90.9
|
|
111.8
|
70%
|
78.3
|
|
Corporate
|
1,668.3
|
100%
|
1,668.3
|
|
1,247.0
|
100%
|
1,247.0
|
|
Transport division
|
17.3
|
100%
|
17.3
|
|
28.5
|
100%
|
28.5
|
|
Total
|
2,919.4
|
|
2,490.5
|
|
2,391.2
|
|
1,991.0
|
|
|
|
|
|
|
|
|
|
|
Borrowings:
|
|
|
|
|
|
|
|
|
Los Pelambres (Note 18)
|
(2,112.4)
|
60%
|
(1,267.4)
|
|
(1,525.8)
|
60%
|
(915.5)
|
|
Centinela (Note 18)
|
(574.1)
|
70%
|
(401.9)
|
|
(311.9)
|
70%
|
(218.3)
|
|
Antucoya (Note 18)
|
(379.1)
|
70%
|
(265.4)
|
|
(411.5)
|
70%
|
(288.1)
|
|
Corporate (Note 18)
|
(1,007.7)
|
100%
|
(1,007.7)
|
|
(1,010.9)
|
100%
|
(1,010.9)
|
|
Transport division (Note
18)
|
(5.9)
|
100%
|
(5.9)
|
|
(16.9)
|
100%
|
(16.9)
|
|
Total (Note 18)
|
(4,079.2)
|
|
(2,948.3)
|
|
(3,277.0)
|
|
(2,449.7)
|
|
|
|
|
|
|
|
|
|
|
Net
(debt)/cash
|
(1,159.8)
|
|
(457.8)
|
|
(885.8)
|
|
(458.7)
|
Production and Sales Statistics (not subject to audit or
review)
a)
Production and
sales volumes for copper, gold and molybdenum
|
|
Production
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
|
|
|
|
|
|
Copper
|
000 tonnes
|
000
tonnes
|
|
000 tonnes
|
000
tonnes
|
|
Los Pelambres
|
300.3
|
275.0
|
|
299.0
|
271.2
|
|
Centinela
|
242.0
|
247.5
|
|
247.9
|
246.1
|
|
Antucoya
|
77.8
|
79.2
|
|
78.4
|
80.8
|
|
Zaldívar (attributable basis -
50%)
|
40.5
|
44.5
|
|
41.9
|
44.4
|
|
Group total
|
660.6
|
646.2
|
|
667.2
|
642.5
|
|
|
|
|
|
|
|
|
Gold
|
000 ounces
|
000
ounces
|
|
000 ounces
|
000
ounces
|
|
Los Pelambres
|
43.3
|
43.1
|
|
42.1
|
42.3
|
|
Centinela
|
165.8
|
133.7
|
|
162.8
|
132.3
|
|
Group total
|
209.1
|
176.8
|
|
204.9
|
174.6
|
|
|
|
|
|
|
|
|
Molybdenum
|
000 tonnes
|
000
tonnes
|
|
000 tonnes
|
000
tonnes
|
|
Los Pelambres
|
8.1
|
7.2
|
|
8.1
|
6.8
|
|
Centinela
|
2.9
|
2.4
|
|
3.0
|
2.4
|
|
Group total
|
11.0
|
9.6
|
|
11.1
|
9.2
|
|
|
|
|
|
|
|
|
Silver
|
000 ounces
|
000
ounces
|
|
000 ounces
|
000
ounces
|
|
Los Pelambres
|
1,613.5
|
1,603.8
|
|
1,509.2
|
1,562.9
|
|
Centinela
|
1,461.0
|
1,212.1
|
|
1,469.9
|
1184.2
|
|
Group total
|
3,074.5
|
2,815.9
|
|
2,979.1
|
2,747.1
|
b)
Cash costs per pound of copper produced and
realised prices per pound of copper and molybdenum sold
|
|
Cash costs
|
Realised
prices
|
|
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
Year ended
31.12.2023
|
Year
ended 31.12.2022
|
|
|
$/lb
|
$/lb
|
$/lb
|
$/lb
|
|
|
|
|
|
|
|
Copper
|
|
|
|
|
|
Los Pelambres
|
1.14
|
1.10
|
3.89
|
3.76
|
|
Centinela
|
1.63
|
1.75
|
3.89
|
3.89
|
|
Antucoya
|
2.63
|
2.50
|
3.89
|
3.95
|
|
Zaldivar (attributable basis -
50%)
|
2.95
|
2.39
|
-
|
-
|
|
Group weighted average (net of by-products)
|
1.61
|
1.61
|
3.89
|
3.84
|
|
|
|
|
|
|
|
Group weighted average (before deducting
by-products)
|
2.31
|
2.19
|
|
|
|
|
|
|
|
|
|
Group weighted average (before deducting by-products and
excluding treatment & refining charges from
concentrate)
|
2.14
|
2.05
|
|
|
|
|
|
|
|
|
|
Cash costs at Los Pelambres comprise:
|
|
|
|
|
|
On-site and shipping
costs
|
1.69
|
1.66
|
|
|
|
Treatment & refining charges for
concentrates
|
0.23
|
0.18
|
|
|
|
Cash costs before deducting by-product
credits
|
1.92
|
1.84
|
|
|
|
By-product credits (principally
molybdenum)
|
(0.78)
|
(0.74)
|
|
|
|
Cash costs (net of by-product credits)
|
1.14
|
1.10
|
|
|
|
|
|
|
|
|
|
Cash costs at Centinela comprise:
|
|
|
|
|
|
On-site and shipping
costs
|
2.40
|
2.29
|
|
|
|
Treatment & refining charges for
concentrates
|
0.17
|
0.15
|
|
|
|
Cash costs before deducting by-product
credits
|
2.57
|
2.44
|
|
|
|
By-product credits (principally
gold)
|
(0.94)
|
(0.69)
|
|
|
|
Cash costs (net of by-product credits)
|
1.63
|
1.75
|
|
|
|
|
|
|
|
|
|
LME
average copper price
|
|
|
3.85
|
4.00
|
|
Gold
|
|
|
$/oz
|
$/oz
|
|
|
|
|
|
|
|
Los Pelambres
|
|
|
1,983
|
1,785
|
|
Centinela
|
|
|
1,991
|
1,806
|
|
Group weighted average
|
|
|
1,990
|
1,801
|
|
|
|
|
|
|
|
Market average price
|
|
|
1,943
|
1,800
|
|
|
|
|
|
|
|
Molybdenum
|
|
|
$/lb
|
$/lb
|
|
|
|
|
|
|
|
Los Pelambres
|
|
|
22.0
|
20.9
|
|
Centinela
|
|
|
21.7
|
20.5
|
|
Group weighted average
|
|
|
22.0
|
20.8
|
|
|
|
|
|
|
|
Market average price
|
|
|
24.1
|
18.7
|
|
|
|
|
|
|
|
Silver
|
|
|
$/oz
|
$/oz
|
|
|
|
|
|
|
|
Los Pelambres
|
|
|
24.1
|
21.2
|
|
Centinela
|
|
|
23.8
|
21.1
|
|
Group weighted average
|
|
|
24.0
|
21.2
|
|
|
|
|
|
|
|
Market average price
|
|
|
23.4
|
21.8
|
Notes to the production and sales
statistics
(i)
For the Group's subsidiaries, the production and sales figures
reflect the total amounts produced and sold by the mine, not the
Group's share of each mine. The Group owns 60% of Los
Pelambres, 70% of Centinela and 70% of Antucoya. For the Zaldívar
joint venture, the production and sales figures reflect the Group's
proportional 50% share.
(ii)
Los Pelambres produces copper and molybdenum concentrates,
Centinela produces copper concentrate, copper cathodes
and molybdenum concentrate, and Antucoya and Zaldívar
produce copper cathodes. The figures for Los
Pelambres and Centinela are expressed in terms of payable metal
contained in concentrate and in cathodes. Los Pelambres and
Centinela are also credited for the gold and silver contained in
the copper concentrate sold. Antucoya and Zaldívar produce cathodes with no
by-products.
(iii)
Cash costs are a measure of the cost of
operational production expressed in terms of cents per pound of
payable copper produced. Cash costs are stated net of by-product
credits. Cash costs exclude depreciation, financial income and
expenses, hedging gains and losses, exchange gains and losses and
corporate tax for all four operations. With sales of concentrates
at Los Pelambres and Centinela, which are sold to smelters and
roasting plants for further processing into fully refined metal,
the price of the concentrate invoiced to the customer reflects the
market value of the fully refined metal less a "treatment and
refining charge" (TC/RC) deduction, to reflect the lower value of
this partially processed material compared with the fully refined
metal. For accounting purposes, revenue reflects the invoiced
amount reflecting the value of the concentrate, and so the TC/RCs
form part of this revenue amount. However, under the standard
industry definition of cash costs, TC/RCs are regarded as an
expense and part of cash costs.
(iv)
Realised copper prices are determined by comparing revenue from
copper sales (after adding back treatment and refining charges for
concentrates) with sales volumes for each mine in the period.
Realised molybdenum and gold prices are calculated on a similar
basis. Realised prices reflect mark-to-market adjustments for sales
contracts which contain provisional pricing mechanisms and gains
and losses on commodity derivatives, which are included within
revenue.
(v)
The totals in the tables above may include some small apparent
differences as the specific individual figures have not been
rounded.
(vi)
The production information and the cash cost information is derived
from the Group's production report for the fourth quarter of 2023,
published on 17 January 2024.
