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SANTIAGO (Reuters) - The world's top copper producer, Chile's Codelco, said on Wednesdayits output fell 10 percent in the first quarter from a year earlierto 373,000 tonnes, but said it was on target to produce 1.708million tonnes this year. Codelco produced 414,000 tonnes of copper in the first quarter of2011, but output was hit during the first three months of this yearby dwindling ore grades -- which the state mining giant seesimproving in the second half of the year. The century-old, massive Chuquicamata mine's production fellsharply to 60,000 tonnes from 100,000 tonnes during the samequarter last year, though output at the promising Andina mineimproved to 62,000 tonnes. "We are confident we will reach our (annual output) target of 1.708million tonnes," CEO Diego Hernandez told a news conference, aslower ore grades had already been factored into annual productionforecasts. Hernandez said he sees market supply and demand fundamentalsremaining tight and does not see copper prices dropping much,despite volatility in global markets amid Europe's swirling crisis. Copper fell on Wednesday in London to a 4-1/2-month low, hit hardby a frenzy of risk-averse selling tied to global growth concerns,but miners point to brisk long-term growth forecasts for Asiangiants China and India and curtailed metal supply as supportingprices in the long-term. Hernandez said Codelco would push ahead with investment projects asplanned, and that copper price fluctuations and rising operationalcosts would not trigger delays in the miner's ambitious $22 billionportfolio of projects planned by 2020. Codelco's cash costs in the first quarter of the year were $1.30per pound of copper, rising from 2011's average $1.16 per pound dueto higher energy costs, exchange rate fluctuations and inflation. Miners in world No.1 copper producer Chile have been hit by soaringenergy prices, labor unrest triggered by high metal prices andunusual, extreme weather in the mineral-rich Atacama, the world'sdriest desert. Codelco said earlier on Wednesday its profits before tax andextraordinary items fell 38 percent during the January-March periodfrom a year earlier to $1.445 billion, due to lower prices forcopper, Chile's top export. The miner, which produces roughly 11 percent of the world's copper,also produced 4,000 tonnes of molybdenum in the first quarter ofthe year, down from 6,000 tonnes in the same period of 2011. Codelco produced a record 1.735 million tonnes of copper last year,but the firm forecasts its 2012 output will dip before rising to2.1 million tonnes by 2020 as its ambitious expansion plans come online. ANGLO NEGOTIATIONS A month-long break from bitter legal proceedings is a finalopportunity for Codelco and global miner Anglo American to head off a lengthy court battle over a multibillion dollarcontract dispute, Hernandez said. The two miners agreed on Tuesday to go back to the negotiatingtable in a push to end a damaging and increasingly acrimoniousdispute over Anglo American's operations in the country'scentral-south region. Hernandez did not provide further details on the reactivation ofthe confidential talks over Codelco's option to buy up to 49percent of Anglo's flagship south-central Chile properties. Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. The e-commerce company in China offers quality products such as Led Track Lighting Fixtures , Led Neon Signs, and more. For more , please visit RGB Led Neon today!
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