Antofagasta reports operations are 'on course' whilst expansion dents earnings for 2009

Overall, Antofagasta said copper production was 442,500 tonnes, ahead of the original forecast for the year of 433,000 tonnes.

This figure was slightly low due to flagship plant Los Pelambres having a higher proportion of harder primary ore, but is set to increase with expansions recently completed.

For now, however, the company faces net earnings for 2009 down 60.9 pct on last year to $667.7m, whilst cash flow from operations tumbled 54 pct and turnover was down, 12.2 pct.

The main different between drop in earnings and turnover was due to exceptionals, with profits down only 20 pct when not taking into account exceptionals.

"2009 was a successful year for the Group" said Marcelo Awad, CEO.

"Our strong financial position enabled us to continue paying special dividends while furthering our growth strategy. We incurred a significant level of capital expenditure in 2009 as planned and increased exploration spend, and we should benefit from additional production in 2010 and also 2011." he said.

"The recent earthquake near Concepcion is not expected to have any material effect on our operations. Los Pelambres suffered a brief stoppage to production as a result of interruption to power supply, and operations were restarted late the following day with normal operating capacity being reached 72 hours later. Repairs are required to facilities which provide the power requirements for the additional production at the plant expansion, and accordingly we now expect to reach the 175,000 tonnes per day level in the second quarter of this year. Los Pelambres currently expects to be able to make up production in the second half of the year and accordingly our forecast Group copper production of 543,000 tonnes remains unchanged. Fortunately, none of our employees or contractors have suffered injury at our sites as a result of the earthquake. However, some employees and many contractors at both the Los Pelambres and Esperanza projects have families in the affected areas of the south of Chile and during the past week we have assisted them in temporarily returning home."

"Supply of some key steel structures for Esperanza fabricated in the damaged zone may also be affected. These factors may delay some of the construction activities at Esperanza but we still expect to start commissioning the mine by the end of this year. The earthquake has clearly caused great loss to some of our stakeholders in the country and we are working with them to provide support where possible through this time."