LONDON, Feb 23 (Reuters) - Chilean copper producers Antofagasta cut its production cost forecast for 2015 by 6.6 percent on Monday due to lower oil prices and a weaker Chilean peso against the US dollar.
The mining company said it expects its net cash cost for 2015 to be $1.40 per pound of copper, about 10 cents per pound lower than it previously thought and in line with 2014.
“The guidance we provided previously was based on assumptions we made several months ago, but in light of the current outlook for the peso and the oil price we have decided to rebase our assumptions for 2015,” Antofagasta chief executive, Diego Hernandez, said in a statement.
Oil prices have around halved since June last year benefiting copper miners, for whom energy accounts for about a fifth of total production costs, according to analysts at Macquarie.
Antofagasta, controlled by Chile’s Luksic family, has also benefited from a roughly 15 percent tumble since the beginning of 2014 in the value of the Chilean peso - in which it pays most of its costs - against the US dollar, the currency used for most copper sales.
“This is a positive development for the company, more than offsetting cost pressures from declining grades at key mines. We expect to see other copper miners in Chile benefit similarly,” Investec analysts said in a note.
Shares in Antofagasta were down 2.3 percent by 1127 GMT, almost in line with the UK-listed mining sector. (Reporting by Silvia Antonioli; editing by Susan Thomas)