According to a research published Friday by government agency Cochilco, Chile’s copper production decreased 1.9 percent to 5.63Mt in 2021 despite increased operational costs.
16 of the study’s 22 large-scale copper mining enterprises reported rising cash costs. The 22’s cash expenses were US$1.328/lb last year, up US$0.10/lb from 2020. This increase was brought on by growing inflation, which also saw increases in the cost of energy, gasoline, freight, and sulfuric acid.
The decrease in production last year was caused in part by lower copper grades.
Cash costs are expenses incurred up until the product (cathode) is sold, less revenue derived from byproducts like molybdenum, acids, gold, and silver. The monetary cost includes a variety of elements, including wages, gasoline, power, materials, acid, smelting, refining, and sea transportation.
According to mining undersecretary Willy Kracht, who spoke at the study’s unveiling, the net cost to cathode is regarded as a crucial data point in the ongoing discussion about mining royalties since it illustrates the vast range of costs in the local industry.
Cochilco emphasized the rise in molybdenum (up 82%), silver (up 23%), and gold (up 2%) prices, which had a favorable effect on byproduct credits and restrained the rise in cash costs.