May 26, 2017 / 3:23 PM / in a year

UPDATE 1-Codelco's Q1 output falls, but higher copper price boosts profits

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SANTIAGO, May 26 (Reuters) - Chile’s state-run Codelco said on Friday that its copper output in the first quarter slid 11 percent from a year ago, as ore grades decline at its aging mines, but an incipient recovery in copper prices boosted its profits.

Codelco, the world no.2 copper miner, said output in the three months to end-March was 390,000 tonnes from its wholly-owned mines, and 416,000 tonnes including its stakes in other deposits.

It reported a pre-tax profit for the three months to end-March of $534 million, which compared with a loss a year ago, and was more than it earned in the whole of 2016.

The company cited the improved copper price - up around 18 percent since October - as a factor, as well a continued push to keep a lid on costs.

“The improved copper price does not allow Codelco to abandon its plans of saving and productivity. Its demanding investment portfolio depends on this,” the company said in a presentation alongside results.

Nonetheless, cash costs rose in the first quarter - up about 6 percent from a year ago to $1.34 per pound of copper.

Codelco is in the midst of an ambitious $18 billion investment program to revamp and expand its mines and remain a major player.

Its plan to convert its flagship Chuquicamata open-pit mine into an underground deposit was nearly half complete, it said .

Reporting by Fabian Cambero, Writing by Rosalba O'Brien; Editing by Franklin Paul and Marguerita Choy

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