The company will give the State US$5.799 billion, thanks to a rise in international copper prices and steady production rates, similar to the previous year. 

In 2010 Codelco recorded a pre-tax profit of US$ 5.799 billion, up from US$ 3.948 billion in 2009. This 47% rise is mainly due to a strong surge in international copper and molybdenum prices

The London Metal Exchange copper prices averaged 342.0 c/lb, a 107.8 c/lb rise from 2009, when it recorded 234.2 c/lb. Molybdenum prices also rose to 33.7 USD/kg in 2010 from 24.5 USD/kg in 2009; this is 9.2 USD/kg more than the previous year.

Additionally, other by-products had a price increase, e.g., anodic slime and sulphuric acid, which also contributed to the higher pre-tax profit.

Company maintains Production

Another factor that positively influenced Codelco’s good 2010 results is that it managed to maintain both copper and molybdenum output.

Its 2010 own copper production reached 1,689,000 mtf, rising to 1,760,000 mtf when Codelco’s 49% interest in El Abra mine is included.

These figures are in keeping with the 2009 results, when Codelco produced 1,702,000 mtf, totalling 1,782,000 mtf, with El Abra production.

Increase in Revenues

Own copper sales revenue totalled US$ 13.459 billion in 2010, up US$ 3.162 billion from 2009 when it totalled US$ 10.297 billion.

Furthermore, there was a strong increase in by-product and other product sales revenue: US$ 709 million in 2010, up from US$ 557 million for the previous 12 months.

However, own mineral sales cost also increased (US$ 7.191 billion in 2010 versus US$ 5.96 billion in 2009).

For this reason, gross profit totalled US$ 6.977 billion in 2010, up from US$ 4.895 billion in 2009.

Strong Increase in Contributions to the State

The Company’s pre-tax profits were US$ 5.799 billion in 2010, which is distributed as follows:

2010 2009

Reserve Tax Law 13.196 1.311 960

Income Tax (57%) 2.332 1.637

Specific Mining Tax 278 177

Net Profit 1.878 1.174

Pre-Tax Profit 5.799 3.948

COMPARABLE NET PROFIT^* 4.610 3.139

^* Equivalent to Codelco’s profit applying the same tax requirements as private companies.

EBITDA

At 31 December 2010,EBITDA (defined as total earnings during the period plus depreciations amortization, interest expenses and taxes, including Law No.13.196) surged to US$ 7.435 billion, up from US$ 5.349 billion in 2009.

Increase in Production Costs

In 2010, total costs and expenses rose to 197.6 c/lb, from 157.8 c/lb in 2009.

This is mainly due to the effect of the retirements plans and collective bargaining, that affected costs by 14.4 cents.

The CPI, exchange rate and US PPI variations and the rise in input prices also resulted in a further 12.2 cents rise in costs. Furthermore, depreciations increased due to the application of IFRS standards, implying an additional 7 cents.

Codelco’s net cathode cost (C3) totalled 171.7 c/lb versus 138.6 c/lb in 2009.

Direct cash cost (C1) rose to 104.4 c/lb during the January-December 2010 period, from 92.9 c/lb for the same period in 2009. C1 is a type of cost used as a benchmark by the mining industry to compare efficiency levels of the different operations.

Reduction in Total Accident Rate

During 2010, Codelco obtained record results in work safety. Codelco’s accident frequency rate – it includes own staff and contract workers – totalled 2.02, down from the 2.42 rate for the prior year.

However, Codelco had to regret 7 fatal accidents, between January and December 2010.

 

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