Untitled - Cesco

SPONSORED BY: 

FINANCIAL 

REPORT ON 

MINING 

N°11 

First 

Quarter 

2011

SPONSORED BY: 

FINANCIAL 

REPORT ON 

MINING 

N°11 

First 

Quarter 

2011 

1

2 

CONTENTS 

.EXECUTIVE SUMMARY 

.NEWS HIGHLIGHTS 

.OUTLOOK FOR WORLD COPPER MARKET 

.WORLD COPPER INDUSTRY 

.COPPER MINING INDUSTRY IN CHILE 

.COPPER MINING INDUSTRY IN PERU 

.EDITOR’S NOTES 

Financial Report on Mining - CESCO 

Number 11, 1st Quarter 2011 

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EXECUTIVE SUMMARY 

During the first quarter of the year, copper prices were high, starting off 2011 30% higher than 2010, and reaching a maximum 

price of 460.31 ¢/lb on February 14, driven by favorable imports from China. 

The main copper-producing companies throughout the world announced quarterly income of approximately US$ 29.2 billion, 

reflecting a 52% increase compared with the same period last year. Profits before taxes, interest, and other non-operating 

effects measured in Ebitda reached approximately US$ 19 billion, with an 87% year-on year increase. 

As in the previous quarter, Vale led the increases in income and Ebitda, which were approximately US$ 13.5 billion and 

US$ 9.2 billion, respectively. Codelco had income of approximately US$ 4.3 billion, an important 30% increase from the 

approximately US$ 3.3 billion obtained in the same period last year. 

Six of the fourteen world companies analyzed in this report showed a decline in production so the increase in production of 

the remaining eight enabled total quarterly world production to increase 4% year-on-year. Vale led the increase in production 

with 105.3%, while Rio Tinto decreased the most, with 14.5%. 

Chilean copper mining produced 1,263,700 M.T. in the first quarter, representing a 4% increase compared with 2010. Only five 

of the twelve Chilean companies reported an increase in production. Codelco, the state-owned company, showed the highest 

total increase in production, surpassing 400,000 M.T. in the period, while El Abra decreased the most in percentage terms, and 

Collahuasi decreased the most in total production, with 31.9 thousand M.T. less than the first quarter of 2010. 

High copper prices enabled Chilean companies to total income of approximately US$ 11.8 billion, representing a 25% year-onyear 

increase, while operating costs continued their upward trend, reaching approximately US$ 6.9 billion, 29% higher than the 

same period in 2010. Similarly, quarterly profits for Chilean copper-producing companies grew 25%, reaching approximately 

US$ 4 billion in the first three months of 2011. 

The Peruvian mining industry, which produced 1,247,000 M.T. of copper last year, performed well this quarter, with production 

of 301,000 M.T. The Peruvian companies included in this report represent 92% of the country’s total copper production. Cerro 

Verde produced 81,900 M.T. in the first quarter, while Southern Peru dropped 14% in the same period. 

Total income of the Peruvian companies included in this report increased 108%, while operating costs were 69% higher than 

they were in 2010. Nevertheless, total profits for the Peruvian companies increased 119%, reaching US$ 1.3 billion in the 

first quarter. 

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NEWS HIGHLIGHTS 

Anglo American 

The company has sold several assets as part of the plan 

announced in 2009 to finance investment plans on the 

current agenda. In January the company completed the sale 

of Moly-Cop and AltaSteel to OneSteel for approximately 

US$ 1 billion. In February the sale of the company’s interests 

in Black Mountain in South Africa for US$ 346 million and 

its interests in Lisheen in Ireland for US$ 546 million was 

finalized. This transaction was part of an agreement to sell 

Anglo Zinc’s assets to Vedanta Resources for a total of 

approximately US$ 1.3 billion, and it included the sale of 

Skorpion Mines for US$ 707 million in December. 

Antofagasta Plc 

The company, which is mostly Chilean capital, continued 

its internationalization process. In February it announced 

an agreement with Eurasian Minerals Inc. to explore copper 

resources in Sweden, which includes a 70% stake in Kiruna 

South. In March Duluth Metals agreed to acquire 100% 

of Franconia, whose assets will be part of the Twin Metals 

company that Antofagasta has a 40% share in, which 

includes the Nokomis deposit in Minnesota (U.S.A.) 

The company has had trouble developing its joint venture 

in Pakistan with Barrick in the Tethyan Copper Company 

(TCC), after the Supreme Court of that country decided to 

suspend the exploration rights for the Reko Diq project. The 

exploration rights were assigned to BHP Billiton in 1993 

and then transferred to TCC in 2006 when Barrick and 

Antofagasta Plc acquired 100% of TCC. 

BHP Billiton 

In February the Anglo-Australian company announced its 

intention to sell the rights to develop coal projects in South 

Africa, including Hartogshof, T-Project, Davel, Pegasus, 

Theunissen, Waterberg, Newcastle, Ermelo and Remhoogte, 

to concentrate on properties that are currently operating 

where the company has invested about US$ 1.5 billion. 



During the quarter the company agreed with Chesapeake 

Energy on the acquisition of the assets of Fayetteville Shale 

in Arkansas, where natural gas is extracted and processed, 

for approximately US$ 4.8 billion. Also in the energy 

business, the company renegotiated its stake in the joint 

venture with Falkland Oil and Gas Limited. 

In March the company announced the approval of the 

investment project Escondida Ore Access, in the biggest 

operating copper mine in the world, for a total cost of US$ 

554 million, which will relocate the crushing and transport 

facilities in order to gain access to higher-grade ore and 

thereby increase production as of 2013. 

Codelco 

In January the Chilean company announced an investment 

plan for 2011 of US$ 3,243 million. Investments include the 

expansion of the Ministro Hales division at a cost of US$ 

650 million, construction of a new level at the El Teniente 

Mine of US$ 300 million, feasibility studies for Andina 

Phase II at a cost of US$ 150 million, and early works to 

equip underground Chuquicamata with a capital cost of US$ 

140 million for this year. 

The investment plan will be partially financed by the sale 

of Edelnor, which collected approximately US$1 billion for 

the company and by the sale of other assets, like the stateowned 

company’s 66% stake in Inca de Oro to Panaust for 

US$ 55.3 million. Another important part of the financing 

will be provided by the owner – the State of Chile- through 

the capitalization of US$ 376 million. 

First Quantum 

The Canadian company announced it will build a copper 

smelter at the Kansanshi mine in Zambia. Internal sources 

state that although the corporate business is mining, the 

smelter is a necessary investment. The project will have a 

capacity of 1.2 million M.T. per year, and it will also process



material from the Sentinel deposit, which is currently under 

development. 

Freeport McMoRan 

In February the company listed in Nueva York carried out the 

2x1 stock split that had been announced in December. The 

origin of the split was the good prospects for copper mining, 

which mean the price of company shares has increased five 

times in the last two years. The company also agreed to pay 

a special dividend of US$ 0.50 per share of common stock 

in June 2011. 

This year the company plans to carry out capital spending of 

US$ 2.5 billion, mainly on the development of underground 

activities at Grasberg, construction of the Climax 

molybdenum mine, and completion of the initial phase of 

the sulfide project at El Abra. 

Grupo México 

The Mexican company with presence in mining through 

its subsidiaries Southern Copper Corp. and ASARCO 

will invest US$ 524 million this year in the expansion of 

Buenavista (formerly Cananea), US$ 324 million in the 

Tía María project, and US$ 271 million in the expansion 

of Toquepala in Peru. It announced the construction of a 

250 watt combined-cycle power plant. The plant, which 

will be built by Siemens, will provide energy for its mining 

operations in Sonora as of March 2013. 

Kazakhmys 

The most important mining company in Kazakhstan, whose 

capital is largely traded in London, announced a plan in 

January to raise between US$ 500 million and US$ 600 

million on the Hong Kong Stock Exchange. In February 

the President of the company, Vladimir Kim, disposed of 

about 11% of the corporate ownership to create the liquidity 

required for its listing in Hong Kong. According to Kim, 

the decision to be listed in Hong Kong does not respond 

mainly to a need for financing, but is an effort to increase 

the company’s visibility and presence among investors in 

China. The company’s good results meant the final capital 

offer was less than the amount announced in March and will 

be about US$ 250 million. 

KGHM 

The CEO of the Polish company, Herbert Wirth, has 

announced it plans to invest US$ 3.1 billion in 2011, with 

approximately US$ 2.6 billion of that amount being intended 

for mining acquisitions. The other key activity the company 

would focus on is energy, where the acquisition of shares 

in Tauron, the second largest generator in Poland, for US$ 

153 million, enabled the company to accumulate 10.39% of 

its capital, without ruling out future increases in that entity. 

Norilsk Níquel 

In January the Russian company reported that through its 

transportation division, Polar, it has commissioned the 

construction of 1,110 fuel supply ships from Astilleros 

OJSC Krasnoyarsk. The fleet renewal program also includes 

the construction of two tugboats. 

In February the company reported the ruling of the arbitration 

court in Moscow, which invalidated the requirements for 

information issued by the Federal Service of Financial 

Markets, in response to the claim of UC Rusal Investment 

Management, one of its main shareholders. The meeting 

alleges the latter would be trying to take over the company 

by means of juridical arguments instead of making a public 

bid. The meeting made an offer for the share of UC Rusal 

Investment Management, which was rejected by omission 

in March. 

Rio Tinto 

In February the company approved the US$ 933 million 

investment that seeks to prolong the useful life of the 

Marandoo iron mine in the Australian region of Pilbara 

to 2030. It also announced it will invest US$ 277 million 

in the second stage of the project in order to increase the 

production capacity of the Iron Ore Company of Canada 

(IOCC) by 40%. 

The company made a bid of US$ 16 per share to acquire 

Riversdale mining, which enabled it to take control of the 

company’s assets in early April. The successful acquisition 

of Río Tinto enabled it to have access to coal exploration 

and mining projects in Mozambique like the Benga project 

developed in conjunction with Tata Steel Limited (35%) 

and the Zambeze coal project, which is 100% owned by 

Riversdale Mining. 

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Río Tinto recognized a bid from Imerys in February to 

acquire its talc business for US$ 340 million, which finally 

took place in July. 

Rio Tinto acknowledged an offer from Imerys in February 

to acquire its talcum business for US$ 340 million, which 

was finally made concrete in July. 

Teck 

The Canadian company was affected by a coal miners’ 

strike at Elkview at the end of January. The strike ended in 

early April when a new collective agreement was reached 

that made it possible to normalize operations. 

In March, the company closed an agreement with Westshore 

Terminals for coal transport from its operations in Alberta 

and British Columbia that will be in effect until 2016. The 

agreement establishes that shipments in the first year will be 

16 M.T. tons, and they will increase annually until the end 

of the agreement. 

Teck also reported in March that it will dispose of its stake 

in the Carrapateena gold and copper project in Australia. It 

will receive US$ 134 million for it and could also receive 

an additional US$ 25 million depending on the results of 

the project. 

Vale 

The Brazilian company dedicated to mining various mineral 

resources started operations at Onça Puma, a nickel mine 

located in the state of Para, in the north of Brazil, with a 

capacity of 53,000 M.T. per year. 

In March a ruling caused the partial shut-down of operations 

at the Copper Cliff smelter in Canada for a minimum of 16 

weeks. The Company estimates this caused a production loss 

of 15,000 M.T. of refined nickel, which is the equivalent of 

5% of total production anticipated by the Company for 2011. 

Vale reached an important agreement with Norsk Hydro 

ASA, a company listed in Oslo and London, whereby it 

transferred part of its portfolio of assets in aluminum. The 

transaction involved 51% of Albras, 57% of Alunorte, 61% 

of PAC, and 60% of the capital of Paragominas, with an 



agreement to transfer the remaining 40% in 2015. 

Xstrata 

In February Xstrata announced the execution of the purchase 

option for 51% of the equity in Jumelles Limited, a subsidiary 

of Zanaga Iron Ore Company Limited (ZIOC). The Zanaga 

project is located in the Lékoumou District of the Republic 

of the Congo, and the agreement commits Xstrata to finance 

feasibility studies for no less than US$ 100 million. 

Also in February the company delivered an update of the 

measured and indicated resources of the Horse-Ivaal-Trukai 

(HIT) copper and gold deposit in Papúa Nueva Guinea, 

where a 52% increase of copper content in the total ore 

resource and 125% in the categories of measured and 

indicated resources was established. 

In March Xstrata announced, together with Gold Corp., its 

intention to reach an agreement with Yamana so that Minera 

Alumbrera, a company where the three have a stake, will 

have a purchase option for four years for Yamana’s rights 

in the Agua Rica copper and gold project in the province 

of Catamarca, in northwestern Argentina. If the option is 

exercised, Yamana will receive US$ 150 million initially 

and another US$ 50 million after the mine has started up. 

Sir John Bond, a member of various boards, joined the board 

of Xstrata as Chairman, replacing Willy Strothotte in that 

position.



OUTLOOK FOR WORLD 

COPPER MARKET 

The foundations for the recovery of the copper market 

have proven to be solid in the first quarter. Neither the 

gradual withdrawal of the fiscal stimulus nor the end of the 

abundance cycle of stocks has had an impact that would 

reverse the trend in the markets throughout 2010. 

According to the latest figures reported by the International 

Copper Study Group (ICSG) for the first quarter of 2011, 

copper demand totaled 4,728 thousand M.T., a 2.4% 

increase over the same period last year. World production 

of mine copper reached 3,876 M.T., the equivalent of a 2.5% 

increase. 

Inventories at the London Metal Exchange, which have 

moved upward since December, closed at 439.85 thousand 

M.T. on March 31. Nevertheless, the average inventory for 

the quarter was 24% lower than 2010 which, in addition to 

the appetite for raw materials in the emerging economies, 

indicates a tighter scenario for this year where the ICSG 

projects a deficit of 377,000 M.T., while Barclays thinks 

it could even reach 670,000 M.T. Reuters states there is a 

consensus among analysts that there will not be a surplus 

in the market this year under any circumstances, and it 

estimates expectations of a deficit between 100,000 M.T. 

and 340,000 M.T. 

It will be necessary to follow China’s performance closely, 

and the developing world in general -a group of countries 

that is expected to grow at 6.5% in 2011- because the 

internal demand of those markets will be the main driver of 

the world economy during the rest of the year. This can be 

explained by the fact that the developed economies will only 

grow 2.4% according to the International Monetary Fund 

(IMF) in its April update of the World Economic Outlook. 

Under these conditions the copper price reacted on the 

London Metal Exchange, averaging 437.52 ¢/lb between 

January and March, the equivalent of a 33% year-on-year 

GRAPH 01 

COPPER PRICE AND INVENTORIES ON THE 

LONDON METAL EXCHANGE 

500 

450 

400 

350 

300 

250 

200 

150 

100 

50 

0 

increase. 

Jan 10 

Feb 10 

Mar1 0 

Mar1 0 

Apr 10 

May1 0 

Jun 10 

Jul 10 

Aug 10 

Sep 10 

Oct 10 

Nov 10 

Dec 10 

Jan 11 

Feb 11 

Mar1 1 

Mar1 1 

Copper Inventories (T.M.T.) Nominal Copper Price (¢/lb) 

600 

Source Prepared by Cesco based on market information. 

The metal started the year 30% higher than last year, reaching 

its historical maximum on February 14 when it hit 460.31 ¢/ 

lb driven by the favorable announcement of Chinese import 

figures. The price closed the quarter at426.35 ¢/lb, after 

some signs that the upward trend might slow down during 

the next three months. 

The greatest uncertainties about the emerging economies 

arise from the increase in inflation due to an increase in 

the price of raw materials, especially food and fuel, which 

they consume intensively. The increase in tension in Europe 

regarding the difficulties in agreeing on a solution to the 

debt crisis of several countries in the Euro zone, as well as 

the fiscal situation in the United States, sow doubts about the 

performance of the developed economies. 

500 

400 

300 

200 

100 

0 

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WORLD COPPER INDUSTRY 



TABLE 01 

INCOME AND EBITDA OF THE LEADING MINING COMPANIES THAT PRODUCE COPPER 

INCOME EBITDA 

COMPANY 2010 1Q 2010 1Q 2011 Var % 2010 1Q 2010 1Q 2011 Var % 

BHP Billiton 62,388 - - - 30,979 - - - 

Rio Tinto 60,323 - - - 25,978 - - - 

Vale 46,481 6,848 13,548 98% 25,922 2,855 9,176 221% 

Xstrata 30,499 - - - 10,386 - - - 

Anglo American 27,960 - - - 11,983 - - - 

Freeport McMoRan Copper & Gold 18,982 4,363 5,709 31% 10,104 2,319 3,168 37% 

Codelco 16,066 3,314 4,305 30% 7,434 1,609 2,750 71% 

Teck 9,339 1,895 2,366 25% 4,297 1,504 1,034 -31% 

Grupo México 8,083 1,994 2,505 26% 4,016 879 1,190 35% 

Norilsk Nickel* - - - - - - - - 

KGHM Polska Miedz 5,841 1,253 1,894 51% 1,087 369 917 148% 

Antofagasta Minerals Plc 4,577 982 1,269 29% 2,772 623 812 30% 

Kazakhmys 3,237 - - - 2,835 - - - 

First Quantum 2,378 551 705 28% - - - - 

The companies whose results are included quarterly in this 

report announced income of approximately US$ 29.2 billion, 

with pre-tax profits, interest, and other non-operating effects 

measured in EBITDA that increased 87% year-on-year for 

the first three months. 

Vale continued to show a favorable growth trend that enabled 

the company to report quarterly income of approximately 

US$ 13.5 billion, a year-on-year increase of 98%. These 

results were generated by an improvement in the operating 

performance of all its business areas, which enabled the 

company to achieve an EBITDA of approximately US$ 

In thousands of US$ 

TOTAL 296,154 21,200 32,301 52% 137,793 10,159 19,047 87% 

Source Prepared by Cesco based on information about the period reported by the companies. 

Notes (*) At the closing of this report, Norilsk Nickel has not published information on its results for 2010. 

9.1 billion, 221% higher than the same period in 2010. The 

company expects to increase the contribution of copper to its 

operating results, which is only 4.1%, but has grown due to 

higher prices. A contribution is also expected in the second 

semester from better weather conditions at Voisey’s Bay 

and the solution of technical imperfections in its operations 

at Sossego, Brazil. 

Codelco, the largest copper-producing company in the 

world, had income of approximately US$ 4.3 billion, a 

significant increase from approximately US$ 3.3 billion in 

the same period last year. According to the company, this



result reflects the effect of the higher price of copper and 

such by-products as molybdenum. This year the company 

will invest approximately US$ 3.2 billion as part of a fiveyear 

US$ 17 billion program, intended fundamentally for 

the development of four structural projects – Mina Ministro 

Hales, Chuquicamata Subterránea, Nueva Andina Fase II, 

and Nuevo Nivel Mina at El Teniente – which will enable 

the company to maintain its income-generating base for the 

next few years. 

The North American company, Freeport, showed a 31% 

increase in quarterly income, which reached approximately 

US$ 5.7 billion. Freeport CEO Richard Adkerson stated that 

these results reflected the sound execution of the company’s 

operating plans as well as an increase in the price of its 

main products – copper and gold. The company expects to 

maintain physical sales of copper this year, although the 

volume of gold sales will drop approximately 15%. 

The copper mining industry continues to show outstanding 

indicators of profitability. In the first quarter of the year 

there was an average return of 9% on capital, which is 59.3% 

higher than the figure reported a year ago for the same group 

of companies. 

Without any important changes in shareholders equity, the 

rate of return of the Chilean state-owned company, Codelco, 

tripled in this quarter compared to 2010, reaching 15%, the 

highest figure for the group of companies reported (38%, if 

comparable net profit is considered) driven by the price of 

copper, its main product. 

The higher return obtained by Vale in this period compared 

with last year was also noteworthy. Return grew 225%, 

positioning the company at the average for this group of 

companies, influenced by the evolution in the prices of all 

its products. 

The negative return shown by First Quantum in 2010 is a 

result of the financial effect of asset revaluation. Deducting 

the accounting effect of the revaluation, the company 

would have reported income of US$ 557 million, whereby 

the ROE ratio would have been 18% for 2010, which is 

a figure comparable to Kazakhmys. This is confirmed by 

the company’s return in the first quarter, which was 8%, 

slightly below the average of the 14 largest copper mining 

companies. 

The Polish company, KGHM, confirmed its good 

performance in the copper industry, making it the second 

most profitable company after Codelco. KGHM had an ROE 

of 12% for the period, which was almost a 70% increase 

over 2010, favored by the large share of copper in its results. 

TABLE 02 

RETURN ON CAPITAL OF THE LEADING 

WORLD COPPER MINING COMPANIES 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

BHP Billiton 0.31 - - - 

Rio Tinto 0.22 - - - 

Var % 

Vale 0.24 0.03 0.09 224.9% 

Xstrata 0.12 - - - 

Anglo American 0.21 - - - 

Freeport 0.34 0.08 0.11 43.3% 

Codelco* 0.41 0.05 0.15 198.6% 

Codelco** 

(comparable net profit) 

ROE = Net Profit / Shareholders Equity 

1.02 0.19 0.38 103.4% 

Teck 0.12 0.06 0.03 -50.2% 

Grupo México - - - - 

Norilsk Nickel 0.28 0.07 0.08 20.8% 

KGHM Polska Miedz 0.31 0.07 0.12 69.6% 

Antofagasta Minerals Plc 0.14 - - - 

Kazakhmys 0.18 - - - 

First Quantum -0.04 - 0.08 - 

Average* 0.22 0.06 0.09 59.3% 

Average** 0.27 0.08 0.13 55% 

Source Prepared by Cesco based on information of the period reported by the companies 

Notes (*) ROE calculated with net profit of the fiscal year. 

(**) ROE calculated with comparable net profit. Comparable net profit is the profit that Codelco 

would have if it paid taxes like private companies of 17%. 

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TABLE 03 

DEBT 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

BHP Billiton 0.42 0.45 0.42 -6% 

Rio Tinto 0.42 0.68 0.42 -39% 

Vale 0.44 0.42 0.40 -3% 

Xstrata 0.40 0.43 0.40 -8% 

Anglo American 0.43 0.49 0.43 -12% 

Freeport 0.50 0.56 0.48 -15% 

Codelco 0.78 0.70 0.76 8% 

Teck 0.45 - 0.44 - 

Grupo México 0.32 0.34 - - 

Norilsk Nickel 0.48 0.43 0.46 7% 

KGHM Polska Miedz 0.29 0.31 0.25 -20% 

Antofagasta Minerals Plc 0.35 - - - 

Kazakhmys 0.25 - - - 

First Quantum 0.36 - 0.36 - 

Average 0.42 0.48 0.44 -9% 

GRAPH 02 

Source Prepared by Cesco based on information about the period reported by companies 

AVERAGE INDUSTRY DEBT RATIO 

0.56 

0.54 

0.52 

0.50 

0.48 

0.46 

0.44 

0.42 

0.40 

Total Liabilities / Total Assets 

Total Liabilities /Total Assets 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

Source Prepared by Cesco based on information about the period reported by companies. 



At the end of the first three months of 2011, the debt reduction 

process observed since the 2008/2009 crisis continued more 

slowly, and even increased slightly compared with the 

closing of 2010, ending up at 44%, which represents a 9% 

reduction compared with 2010. 

Rio Tinto, which stood out in the previous quarter due to an 

annual reduction of 30% in the debt ratio, maintained the 

ratio compared with the previous period, indicating a pause 

in the restructuring of the balance sheet. The year-on-year 

variation of -39% confirmed the trend seen throughout 2010, 

for Anglo American, BHP Billiton and Xstrata as well. 

Although Codelco increased its year-on-year debt, it 

maintained a similar level to the four previous quarters, 

even experiencing a slight reduction compared with the 

fourth quarter of 2010. The resources to finance this year’s 

investment plan (approximately US$ 3.2 billion) will be 

obtained through sale of the stake in the electric generation 

plant E-CL (formerly Edelnor) for about US$ 1 billion; 1.5 

billion will come from amortization, and the remaining 700 

million may be financed by the recapitalization of dividends 

contributed by the owner, which has already promised US$ 

356 million.



TABLE 04 

MINE COPPER PRODUCTION 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

In thousands of M.T. 

Var % 

Freeport 1,775 421 431 2.3% 

Codelco 1,689 383 415 8.3% 

BHP Billiton 1,114 229 274 19.4% 

Xstrata 913 223 210 -5.8% 

Grupo Mexico 688 159 167 5.2% 

Rio Tinto 678 165 141 -14.5% 

Anglo American 623 161 139 -13.7% 

Antofagasta Plc 521 118 130 10.3% 

KGHM Polska Miedz 464 108 140 29.5% 

Norilsk Nickel 389 97 94 -3.1% 

Kazakhmys 338 81 72 -11.2% 

First Quantum 323 86 75 -12.9% 

Teck 313 72 75 4.2% 

Vale 207 34 70 105.3% 

Total 10,035 2,338 2,432 4.0% 

Source Prepared by Cesco based on information about the period reported by the companies. 

GRAPH 03 

% Var.1Q 2011 / 1Q 2010 

CHANGE IN COPPER PRODUCTION 

120 

100 

80 

60 

40 

20 

0 

20 

105.3 

Vale 

29.5 

KGHM 

19.4 

BHP Billiton 

10.3 

8.3 


Codelco 

5.2 

4.2 

Grupo Mexico 

Teck 

2.3 

Freeport 

-3.1 

-5.8 

Norilsk Nickel 

Xstrata 

-11.2 

-12.0 

Kazakhmys 

-13.7 

-14.5 

First Quantum 


Rio Tinto 


During the first quarter of the year world production was 

3,876 T.M.T., which represented 2.5% growth compared 

with the previous year. The aggregate production of mine 

copper for the 14 mining companies included in this report 

increased 4%, reaching 2,432 T.M.T. With this result, the 

share of the 14 reported companies in world production was 

62.7%. 

In absolute terms, BHP Billiton is the mining company 

with the largest increase, which enabled the company to 

compensate for decreases at Rio Tinto, Anglo American, 

First Quantum and Kazakhmys. BHP Billiton’s results were 

impacted positively by Olympic Dam and Antamina, while 

production at Escondida in Chile fell, also influencing Rio 

Tinto, whose stake in the mine is 30%. 

Anglo American saw its copper production fall 13.7% due to 

the expected drop in grades and unusual rains that affected 

normal operations at Collahuasi. The lower ore grade and 

maintenance scheduled for March at Los Bronces also had 

a negative effect, although it was partially offset by less 

hardness of the rock. 

Vale doubled production compared with 2010, but it 

experienced a slight drop compared with the last quarter 

due to technical difficulties and maintenance work at 

Sossego. Poor weather conditions in northern Canada also 

prevented smooth shipments from Voisey’s Bay, although 

production remained at a comparable level to the company’s 

historical levels due to a larger contribution from Sudbury, 

and marginally from Thompson, both in Canada, together 

with the entry into operation of Tres Valles in Chile, whose 

annual production is projected to be 18.5 T.M.T. in 2011. 

The Chilean state-owned company, Codelco, improved its 

contribution to world copper supply significantly, increasing 

production to 415 T.M.T. The good operating performance 

of the Radomiro Tomic, Andina and El Teniente divisions 

more than compensated for the drop at Chuquicamata and 

Gaby. 

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TABLE 05 

ATTRIBUTABLE MINE 

COPPER PRODUCTION 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Codelco 1,769 402 425 5.6% 

Freeport 1,427 337 350 3.8% 

BHP Billiton 1,114 229 274 19.4% 

Xstrata 843 215 210 -2.3% 

Rio Tinto 678 165 141 -14.5% 

Anglo American 630 161 139 -13.7% 

Grupo México 559 126 142 12.6% 

KGHM 464 108 140 29.5% 

Norilsk Nickel 389 97 94 -3.1% 

Kazakhmys 335 81 72 -11.2% 

Antofagasta 328 75 78 4.6% 

First Quantum 277 74 62 -16.5% 

Teck 285 65 69 6% 

Vale 207 34 70 105.9% 

Total 9,305 2,170 2,266 4.4% 

Source Prepared by Cesco based on information about the period reported by companies. 

Notes (*)Codelco includes 49% of El Abra 

(**)Xstrata owns 50% of Alumbrera 

(***)Grupo México owns 80% of Southern Copper Peru and 100% of Asarco 

(****)Anglo American owns 44% of Collahuasi 

(*****)AMSA owns 60% of Los Pelambres, 70% of El Tesoro, 74.2% of Michilla and 70% of 

Esperanza 

(******)First Quantum owns 80% of Kasanshi and 100% of Guelb Moghrein, Frontier and 

Bwana Mkubwa, 

(*******)Teck owns 97.5% de Highland Valley Copper, 22.5% of Antamina, 76.5% of Quebrada 

Blanca, 90% of Carmen de Andacollo, and 100% of Duck Pond, 

In thousands of M.T. GRAPH 04 

QUARTERLY VARIATION 

EXCHANGE RATE TO US$ 

8% 

6% 

4% 

2% 

0% 

4.3% 

US$ 

£ 




TABLE 06 

MARKETS WHERE THE LEADING MINING 

COMPANIES THAT PRODUCE COPPER 

ARE TRADED 

EXCHANGE CURRENCY COMPANIES 

London Stock 

Exchange (LSE) 

New York Stock 

Exchange (NYSE) 

Bolsa Mexicana de 

Valores (BMV) 

Warsow Stock 

Exchange (GPW) 

Australian Securities 

Exchange (ASX) 

Moscow Interbank 

Currency Exchange 

(MICEX) 

Pounds 

sterling (£) 

Dollars (US$) Freeport 

Mexican pesos 

($MX) 

Polish zloty 

(PLN) 

Australian 

dollars (AUD) 

Anglo American, Antofagasta 

Plc, BHP Billiton Plc, Rio Tinto 

Plc, Xstrata y Kazakhmys Plc 

Grupo Mexico 

KGHM 

BHP Billiton Ltd.y Rio Tinto 

Ltd. 

Rubles (RUB) Norilsk Nickel 

BM&FBOVESPA Reals ($R) Vale 

Toronto Stock 

Exchange (TSX) 

1.6% 

US$ 

AUD 

3.1% 

US$ 

R$ 

Canadian 

dollars (CAD) 

4.0% 

US$ 

$ mx 

7.0% 

US$ 

RUB 

First Quantum y Teck 

6.2% 

US$ 

PLN 

Source Prepared by Cesco based on market information.



GRAPH 05 

MARKET CAPITALIZATION 

300 

250 

200 

150 

100 

50 

0 

BHP Billiton 

249.9 

Vale 

162.9 

Rio Tinto 

147.0 

Xstrata 

68.7 


68.2 

In billions of US$ 

Freeport 

53.1 

Thirteen of the mining companies included in this report 

are publicly held, and they are quoted in the most important 

financial markets in the world. The aggregate market 

capitalization for the 13 companies was approximately US$ 

918.5 billion this quarter, a slight increase of 0.9% since the 

last report corresponding to the year-end closing. 

This result was mainly influenced by the evolution in the 

copper price and by the evolution of various currencies to 

the dollar, which is the currency used to express the result. 

Six companies quote part of their property on the London 

Stock Exchange (LSE), and they were favored in the 

calculation of their market value by a 4.3% appreciation of 

the pound to the dollar. 


GRAPH 06 

MARKET CAPITALIZATION AGGREGATE OF 

COMPANIES REPORTED 

1.000 

800 

600 

400 

200 

49.9 

0 

Teck 

804 

31.2 

Grupo Mexico 

2007 

29.2 

278 

Antofagasta 

22.2 

705 

KGHM 

13.1 

910 918 

2007 2008 2009 2010 2011 1T 

Kazakhmys 

12.0 

In billions of US$ 


First Quantum 

11.1 

2008 2009 2010 2011 1T 


In the case of the Australian Securities Exchange (ASX), 

the second most important exchange for the companies in 

this report, its main currency – the Australian dollar (AUD) 

– was revalued by 1.6% to the U.S. dollar. The revaluation 

contributed to the values shown by BHP Billiton Ltd. and 

Rio Tinto Ltd., whose value in Australian dollars dropped 

0.84%, but represents a 2.77% increase in U.S. currency 

according to the closing values of the respective periods. 

At the company level the best performance was shown by 

KGHM, whose market value (Warsaw Stock Exchange) grew 

6.9% when measured in Zlotys (Pln), the local currency, and 

13.5% in dollars, favored by the exchange rate. 

13

14 

TABLE 07 

MARKET CAPITALIZATION AND OWNERSHIP OF MAJOR MINING 




COMPANY MAIN OWNER(S) 2011-1Q 2010 2009 2008 2007 

BHP Billiton Plc 

BHP Billiton Ltd. 

PLC Nominees (Proprietary) 

Limited (18.94%) 

National City Nominees Limited (4.36%) 

GEPF Equity (3.97%) 

Chase Nominees Limited LEND (3.31%) 

Chase Nominees Limited (3.10%) 

State Street Nominees Limited OM02 (3.09%) 

Other Inverstors (63.23%) 

HSBC Australia Nominees Pty Ltd (16.93%) 

J P Morgan Nominees Australia Limited (11.33%) 

National Nominees Ltd (10.54%) 

Citicorp Nominees Pty Limited 

BHP Billiton ADR Holders A/C (7.40%) 

Citicorp Nominees Pty Limited (4.62%) 


88.32 87.85 70.56 42.09 73.30 

161.59 154.55 128.94 70.68 118.81 

BHP Billiton Total 249.91 242.40 199.50 112.77 192.11 

Rio Tinto Plc 

Rio Tinto Ltd. 

Shining Prospect Pte. Ltd (12.00%) 

BlackRock Inc. (8.38%) 

Capital Research and Management Company (4.95%) 

AXA S.A. (4.86%) 

Legal & General plc (3.97%) 

The Capital Group Companies. Inc (3.90%) 


HSBC Custody Nominees (Australia) Limited (20.38%) 

JP Morgan Nominees Australia Limited (13.91%) 

National Nominees Limited (13.47%) 

Citicorp Nominees Pty Limited (4.39%) 

Cogent Nominees Pty Limited (2.53%) 


108.81 105.88 82.17 21.81 114.18 

38.16 37.88 40.46 12.00 53.95 

Rio Tinto Total 146.98 143.76 122.63 33.82 168.12 

Vale (común) 

Vale (preferente) 

Valepar (53.5%) 

NYSE – ADR (24.6%) 

BNDESPar (6.8%) 


NYSE – ADR (39.8%) 

BNDESPar (3.5%) 

Valepar (1.0%) 


104.70 106.90 91.23 37.71 100.49 

58.22 58.63 48.69 20.77 55.02 

Vale Total 162.92 165.53 139.92 58.48 155.51 

Xstrata 

Glencore (34.1%) 

BlackRock. Inc (5.95%) 


In billons of US$ 

68.69 68.08 52.12 5.18 39.78



TABLE 07 - FROM PREVIOUS PAGE 

MARKET CAPITALIZATION AND OWNERSHIP OF MAJOR MINING 


In billons of US$ 

COMPANY MAIN OWNER(S) 2011-1Q 2010 2009 2008 2007 


Freeport 


PLC Nominees (Pty) Limited (37.33%) 

BlackRock. Inc. (5.83%) 

Public InvesT.M.ent Corporation (PIC) (5.82%) 

Legal & General plc (4.51%) 

Tarl InvesT.M.ent Holdings Limited (3.58%) 

Epoch Two InvesT.M.ent Holdings Limited (3.19%) 


State Street Corporation (4.09%) 

Vanguard Group. Inc. (3.84%) 

Blackrock Group Limited (2.81%) 

JP Morgan Chase & Company (2.77%) 

Blackrock Institutional Trust Company (2.62%) 

FMR LLC (2.20%) 


Ing Bank (Eurasia) (42.18%) 

NRD (12.98%) 

DKK (9.14%) 

Sberbank of Russia (12.5%) 


68.21 62.55 52.21 27.38 81.88 

53.05 56.55 33.08 9.34 34.93 

49.94 44.80 26.78 12.96 50.12 

Teck N/A* 31.24 35.97 20.73 2.39 15.84 

Grupo México 

KGHM 


Kazakhmys Plc 

Empresarios Industriales de México. S.A. de C.V. 

(36.02%)** 

Germán Larrea Mota Velasco (15.55%) 

Banamex División Fiduciaria (4.35%) 


Polish State Treasury (31.79%) 


Familia Luksic (65%) 

Other Inverstors (35%) 

Cuprum Holding B.V. (25.4%) 

The State Property & Privatisation Committee of the 

Ministry of Finance of the Republic of Kazakhstan 

(15%) 

Joint Stock Company National Welfare Fund Samruk- 

Kazyna (11%) 

Harper Finance Limited (5.5%) 


29.17 31.98 17.83 4.87 16.14 

13.11 11.54 7.40 1.93 8.91 

22.16 24.53 15.50 6.12 14.16 

11.99 13.32 11.27 1.80 20.60 

First Quantum N/A* 11.12 9.30 6.03 0.99 5.87 

TOTAL 918.49 910.31 705.00 278.03 803.99 


Notes (*) Teck and First Quantum doesn’t report significal shareholders in the period. 

(**) Larrea family directly or indirectly, controls Grupo México because of being major shareholders in Empresarios Industriales de México. S.A de C.V. 

15

16 

GRAPH 07 

PRICES OF SHARES TRADED IN MAJOR MARKETS 

50 

45 

40 

35 

30 

25 

20 

15 

53 

51 

49 

47 

45 

43 

41 

39 

37 

35 

100 

90 

80 

70 

60 

50 

40 

30 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

BHP Billiton Plc (£) 

Rio Tinto (£) 

Anglo American (£) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Grupo Mexico ($ MX) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

BHP Billiton Ltd. (AUD) Rio Tinto Ltd. (AUD) 

18 

17 

16 

15 

14 

13 

12 

11 

10 

200 

180 

160 

140 

120 

100 

150 

130 

110 

90 

70 

50 

30 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Xstrata (£) 

Antofagasta Plc (£) 

Kazakhmys Plc (£) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

KGHM (PLN) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Teck (CAD) First Quantum (CAD) 

130 

120 

110 

100 

90 

80 

70 

60 

50 

40 

65 

60 

55 

50 

45 

40 

8000 

7500 

7000 

6500 

6000 

5500 

5000 



11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Freeport (US$) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Vale (preferente) (R$) Vale (común) (R$) 

11 Oct 10 

27 Oct 10 

12 Nov 10 

30 Nov 10 

16 Dec 10 

03 Jan 11 

19 Jan 11 

04 Feb 11 

22 Feb 11 

10 Mar 11 

31 Mar 11 

Norilsk Nickel (RUB)



COPPER MINING 

INDUSTRY IN CHILE 

The Chilean copper mining industry produced 1,263,700 

M.T. in the first quarter, showing better performance than 

the same period of 2010 when total copper production in the 

country was 1,225,200 M.T. This result represented 32.6% 

of world production in the period, according to the figures 

reported by ICSG. 

Detailed information is provided in this report for the twelve 

largest mining companies that operate in Chile, which 

together represent 30.4% of world production. Only five of 

those companies performed better this quarter than they had 

the previous year. 

Codelco, the largest copper producer in the world, was 

one of the exceptions with positive figures during this 

quarter. Production increased above 400 T.M.T., making 

it the company’s best year start on record. The result is the 

consequence of better performance at the Radomiro Tomic 

(+34 T.M.T.), Andina (+14 T.M.T.), and El Teniente (+7 

T.M.T.) divisions, and to a lesser degree at El Salvador (+1 

T.M.T.), which offset lower production at Chuquicamata 

(-17 T.M.T.) and Gaby (-7 T.M.T.). 

Escondida, the biggest copper mine in the world, had 

slightly lower results than it did in the same period last year 

which was due partly to less availability of equipment, as 

the company explained, but mainly to restrictions caused 

by maintenance activities in the crushing and conveyor belt 

system. 

Production at Antofagasta Minerals increased 18% 

compared to 2010, with 129,800 M.T. of copper produced in 

the period. In the first quarter of the year the first shipments 

were made from Esperanza, which contributed 7,400 M.T. 

of copper to the company total. This result, however, was 

lower than initial projections, which aimed at production 

of 19 T.M.T. in the first quarter of 2011. That goal was 

impossible to achieve due to delays in the startup of the 

operation. Los Pelambres, the company’s biggest operation, 

which produced 384 T.M.T. of copper in 2010, faced lower 

grades than projected, with production 1,100 M.T. less 

than the first quarter of last year, despite a 10% increase in 

the amount of ore treated. El Tesoro carried out scheduled 

maintenance works that had a negative impact on copper 

production in the period (-3,500 M.T.), while Michilla (-300 

M.T.) faced lower ore grades, which were partially offset by 

a better yield in ore treatment. 

Collahuasi, a joint venture of AngloAmerican and Xstrata 

that was the fourth largest Chilean producer of copper in 

2010, saw its production reduced significantly (-31,900 

M.T., -22.6%) in the first quarter of 2011, totaling 109,500 

M.T. of copper in the period. The reduction was influenced 

by unusually severe weather conditions that forced 

modifications in the production plan. 

The performance of Anglo American Chile, which produced 

89,100 M.T. of copper between its Norte and Sur operations, 

was influenced by the results of Los Bronces. The company 

hopes, however, to reverse the downward trend of previous 

periods with the entry into operation in the fourth quarter of 

2011 of the Los Bronces expansion, a project with a capital 

cost of US$ 2.8 billion that will raise mine production from 

230 T.M.T. to 400 T.M.T. of copper per year. 

GRAPH 08 

% Var. 1Q-2011 / 1Q-2010 


50 

30 

10 

-10 

-30 

-50 

44.2 

Candelaria 

11.9 

Lomas Bayas 

11.9 

Cerro Colorado 

10.3 


8.1 

Codelco 

-4.9 

Minera Escondida 

-5.8 

Zaldívar 

-8.0 

Spence 

-8.6 

Anglo American Chile 

-22.6 

Collahuasi 

-28.5 

-43.8 

Quebrada Blanca 

El Abra 

Source Prepared by Cesco based on information reported by Cochilco. 

17

18 

The El Abra mine, whose transition from oxide to sulfide 

treatment took place this quarter, suffered another drop in 

production, which was 43.8% less than it was in the same 

period of 2010. It is expected, however, that the US$ 725 

million project will reach its design levels of about 135 

T.M.T. of copper per year in the second half of this year. 

A better grade of treated ore explains the good performance 

of Candelaria, which increased copper production 44.2% 

in the first quarter, reaching 36,200 M.T. of copper in that 

period. The opposite occurred at Quebrada Blanca, which 

TABLE 08 

COPPER PRODUCTION OF CHILEAN INDUSTRY BY COMPANY 



In M.T. of fine copper 

COMPANY MAIN OWNER(S) 2010 1Q 2010 1Q 2011 Var % 

Codelco Chilean State 1,689,100 383,300 414,200 8.1% 

Minera Escondida 

BHP Billiton (57.5%) 

Rio Tinto (30%) 

Jeco Corp (12.5%) 

1,086,700 245,600 233,600 -4.9% 

Antofagasta Minerals Antofagasta Plc 521,000 117,680 129,800 10.3% 

Collahuasi 

Anglo American plc (44%) 

Xstrata plc (44%) 

Mitsui & Co. Ltd. y Mitsui Mining & Smelting Co. Ltd. (7%) 

Nippon Mining & Metals Co. Ltd (5%) 

decreased 29% in the first quarter to 15,800 M.T., due to 

lower ore grades and lower production as a result of faults 

in the walls of the mine in the fourth quarter of 2010 and 

unusual rain in January, which made operations difficult 

and deteriorated the copper solution. These factors in 

conjunction signified that the result ended up 5,500 M.T. 

short of the plan. 

The “Other” category has increased production in response 

to the good prices, which have made it possible to operate 

deposits with higher operating costs. 

504,000 141,400 109,500 -22.6% 

Anglo American Chile Anglo American Plc 397,300 97,500 89,100 -8.6% 

Spence BHP Billiton 178,100 45,000 41,400 -8.0% 

El Abra Freeport McMoRan (51%) Codelco (49%) 145,200 38,400 21,600 -43.8% 

Zaldívar Barrick Gold Corp. 144,400 36,300 34,200 -5.8% 

Candelaria Freeport McMoRan (80%) Sumitomo Corp. (20%) 136,400 25,100 36,200 44.2% 

Cerro Colorado BHP Billiton 89,000 20,200 22,600 11.9% 

Quebrada Blanca Teck (76.5%) Pudahuel (13.5%) Enami (10%) 86,200 22,100 15,800 -28.5% 

Lomas Bayas Xstrata 71,800 16,800 18,800 11.9% 

Other 306,100 35,820 96,900 170.5% 

TOTAL 5,368,800 1,225,200 1,263,700 3.1% 

Source Prepared by Cesco based on information reported by Cochilco.



GRAPH 09.1 

ANNUALIZED PRODUCTION 

1,800,000 

1,700,000 

1,600,000 

1,500,000 

1,400,000 

1,300,000 

1,200,000 

1,100,000 

1,000,000 

GRAPH 09.3 


250,000 

200,000 

150,000 

100,000 

50,000 

0 

M.T. of fine copper (prod. over 1 million m.t.) GRAPH 09.2 

M.T. of fine copper (prod. between 350 thousand and 1 million m.t.) 

Dec 06 Aug 07 Apr 08 Dec 08 Aug 09 Apr 10 Dec 10 

Codelco Escondida 

M.T. of fine copper (prod. between 100 thousand and 350 thousand m.t.) 


Source Prepared by Cesco based on information reported by Cochilco. Source Prepared by Cesco based on information reported by Cochilco. 


El Abra 

Zaldívar Candelaria Spence 


600,000 

550,000 

500,000 

450,000 

400,000 

350,000 


GRAPH 09.4 

M.T. of fine copper (prod. up to 100 thousand m.t.) 


120,000 

100,000 

80,000 

60,000 

40,000 

20,000 

0 

Antofagasta Plc Collahuasi Anglo American 

Dec 06 Jul 07 Feb 08 Sep 08 Apr 09 Nov 09 Jun 10 Jan 11 

Cerro Colorado Quebrada Blanca Lomas Bayas 


19

20 

TABLE 09 

OTHER MINERALS IN THE CHILEAN INDUSTRY BY COMPANY 



COMPANY / PRODUCT MAIN OWNER(S) 2010 1Q 2010 1Q 2011 Var % 

IRON AND STEEL 

CAP (Iron, shipments in T.M.T.) 

Invercap S.A. (31.2%) 

Mitsubishi Corporation (19.3%) 

Banco de Chile (5.0%) 

10,213 1,906 2,289 20% 

CAP (Steel, shipments in M.T.) Other (44.5%) 

670,525 196,222 313,576 60% 

NITRATES 

SQM (Iodine and by-products, in M.T.) 

Sociedad de Inversiones Pampa 

Calichera (26.1%%) 

521,000 - - - 

SQM (Lithium and by-products, in M.T.) Inversiones El Boldo Ltda. (23.68%) 504,000 - - - 

The Bank of New York (16.69%) 

SQM (Chloride and Potassium Sulfate, in M.T.) Inversiones RAC Chile Ltda. (8.32%) 397,300 - - - 

SQM (Industrial Nitrates, in M.T.) 

Other (25.2%) 

178,100 - - - 

MOLYBDENUM 

Molymet (FEMO, prod. in millions of lbs. of Mo) Capitalización y Rentas del Pacífico 40,416 

- - 

Molymet (Pure products, prod. in millions of lbs. of Mo) 

S.A. (35,56%) 

Other (64,44%) 

10,547 34,950* - - 

Molymet (Oxide, prod. in millions of lbs. of Mo) 138,905 - - 

Source Prepared by Cesco based on financial information of the period delivered to the Securities and Insurance Commission by the companies and public information about the companies. 

Notes (*)As of the 2010 annual report, Molymet provides information about its FeMo production, pure products and oxide, and it no longer reports data on Own Sales and Processing 

CAP, the company dedicated to iron mining and steel 

production that was severely affected by the earthquake in 

February 2010, succeeded in surpassing its shipments in the 

first quarter of 2010 during this quarter, making it the best 

year start since 2007. 

The mining subsidiary of the CAP group, which contributes 

55% of the group’s income on the average, shipped a total of 

2,289 T.M.T. of iron, representing a 20% increase compared 

with 2010, while CAP steel shipped 313 T.M.T., 60% more, 

year on year. 

Since its merger with Mitsubishi, the company, which sees its 

greatest growth potential in mining, has announced various 

projects involving investment of about US$ 1 billion. The 

projects include the opening of the Cerro Negro deposit 

and the expansion of Los Colorados whereby the company 

expects to raise production from the current 10 million M.T. 

to more than 18 million M.T. in 2013.



TABLE 10 

INCOME 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Codelco 16,066 3,314 4,305 30% 

Minera Escondida 9,212 1,997 2,145 7% 

Antofagasta Minerals 4,264 925 1,203 30% 

Collahuasi 3,929 1,013 947 -7% 

Anglo American 4,085 1,010 1,248 24% 

Spence - - 483 - 

In millions of US$ 

El Abra 1,126 282 207 -27% 

Zaldívar 1,119 247 323 31% 

Candelaria 1,434 254 443 75% 

Cerro Colorado 810 161 241 49% 

Quebrada Blanca 677 180 144 -20% 

Lomas Bayas 560 105 170 62% 

Total 43,283 9,490 11,858 25% 

CAP 1,994 317 595 88% 

SQM 1,830 389 480 24% 

Molymet 1,327 278 343 24% 

Total 5,151 983 983 44% 

Source Prepared by Cesco based on financial information of the period provided by companies 

to the Securities and Insurance Commission and public information about the companies. 

Chilean copper mining was favored by the economic 

environment, driven strongly by Chinese imports of raw 

materials. According to data published by Cochilco, the 

value of mining exports represented 60% of total Chilean 

exports in the first quarter of the year, while copper alone 

represented 53.9% in the same period. 

Income of the leading mining companies in Chile increased 

significantly. Copper mining totaled approximately US$ 

11.9 billion, increasing 25% in one year, while the companies 

that produce other minerals also benefited from the prices of 

steel, iron, molybdenum, and industrial chemicals. 

The three mining companies that showed the highest 

percentage increases in copper production in the first quarter 

–Candelaria, Lomas Bayas and Cerro Colorado-, had the 

highest increases in income, a result that was reinforced by 

the good copper price. 

The income of Antofagasta Minerals, which had the 

fourth largest increase in copper production in the first 

quarter, increased 30%, while Codelco’s income totaled 

approximately US$ 4.3 billion in the quarter, driven by 

the value of copper sales, in addition to an increase in the 

volume of copper sold. 

The main destination of Codelco’s sales was the Asian 

market, which attracted 54%. China alone received 33% 

of the total, although it reduced its share compared with 

2010, when the region attracted 58% of sales and China 

alone received 42%. Despite fears about the future of the 

developed economies, Europe’s market share grew from 

19% to 23%, and North America grew from 8% to 12%. 

The South American markets reduced their share from 13% 

in the first quarter of 2010 to 10% in 2011. 

Only three of the fifteen companies reported showed lower 

income in the quarter, compared with the same period last 

year. Collahuasi suffered a 22.6% drop in production; this 

had an adverse impact on the company’s income, which fell 

7% compared with 2010. The same reasons influenced the 

income of El Abra and Quebrada Blanca, which led the falls 

in production, consequently showing the largest year-onyear 

drops in income, with -27% and -40%, respectively. 

Other companies that suffered falls in production had higher 

income than in the first quarter of 2010 – Anglo American, 

Zaldivar and Escondida. 

21

22 

TABLE 11 

OPERATING COSTS 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Codelco 9,494 1,898 2,343 23% 

Minera Escondida 3,546 733 854,7 17% 

Antofagasta Minerals 1,779 366 463 27% 

Collahuasi 1,243 324 332,3 2% 

Anglo American 2,337 551 795,3 44% 

Spence - - 193 - 


El Abra 508 116 83,7 -28% 

Zaldívar 401 100 118,5 18% 

Candelaria 733 151 195,3 29% 

Cerro Colorado 478 82 118,8 45% 

Quebrada Blanca 351 71 68,7 -3% 

Lomas Bayas 286 57 71,2 25% 

Total 25,272 5,366 6,895.7 29% 

CAP 1,994 317 595 88% 

SQM 1,830 389 480 24% 

Molymet 1,327 278 343 24% 

Source Prepared by Cesco based on financial information of the period provided to the 

Securities and Insurance Commission by the companies and public information about the 

companies. 

In the period covered by this report, the aggregate operating 

costs of Chilean companies that produce copper grew 29% 

compared with 2010, even though production for those 

companies only increased 3%. 

Technical difficulties in the ore extraction phase, as well 

as higher water and energy costs, affected the companies’ 

aggregate costs. The wholesale price index (WPI) for 

electric energy, gas, and water issued periodically by the 

Central Bank of Chile showed a 2% year-on-year increase, 

while the average price of energy increased 20% in the SIC 

and 5% in the SING, according to figures from the National 

Energy Commission (CNE). 



In the group of companies reported, only El Abra and 

Quebrada Blanca showed a reduction in operating costs, 

consistent with the drops in their respective production 

levels. 

Compañía Minera Cerro Colorado showed the highest 

relative increase in operating costs for the period reported 

(+45%), which were influenced by the cost of third party 

cathodes (+US$ 17.3 million, +152%), higher payment to 

contractors (+US$ 8.3 million, +39%), as well as electricity 

and fuel (+US$ 3.9 million, +24.6%). 

Anglo American Chile had a 44% increase in operating 

costs, which reached US$ 795.3 million. Anglo Sur showed 

a 22.7% increase, which included higher spending on 

exploration of US$ 18.7 million (+228%). Anglo Norte 

followed a similar pattern, which meant that in the first 

quarter of 2011 operating costs of US$ 516.5 million were 

recorded (+55.3%), with exploration expenditures of US$ 

3.1 million in the period (+107%). 

Operating costs at Antofagasta Minerals increased 27% from 

March to March, but if the comparison excludes the costs 

of Minera Esperanza (US$ 28.1 million), where shipments 

started in January, the increase was 18.8%. Minera Michilla 

showed operating costs in the period that were 30% higher 

than in 2010, while at El Tesoro the increase was 24.6% and 

14.7% at Los Pelambres in a scenario where production was 

lower at the three operations. 

The state-owned company Codelco showed a 23% increase 

in operating costs, which was a direct result of the company’s 

year-on-year growth in production (+8%), together with the 

evolution of the price of the materials, fuel, and energy that 

are relevant to the operation. 

Collahuasi´s operating costs increased moderately (+2%), 

even though its copper production in the period fell 22.6%. 

In the same period Minera Escondida had operating costs of 

US$ 854.7, a figure influenced by an increase in payment 

to contractors (+US$ 54.9 million, +27.3%), materials 

and other inputs (+US$ 37.6 million, +18.4%), fuel and



electricity (+US$ 40 million, +34.5%), and salaries and 

benefits paid (+US$ 24.87 million, +40.7%). 

CAP’s operating costs evolved as expected according to the 

increase in shipments of iron (+20%) and steel (+60%) in 

the first three months of 2011. This was confirmed by the 

fact that sales costs, which represent 90% of operating costs, 

increased US$ 116 million, which was 45% more than in the 

same period in 2010. 

TABLE 12 

UNIT COSTS (CASH COST - C1) 

COMPANY 2010 

1Q 

2011 

Var % 

Codelco 102.3 98.2 -4% 

Minera Escondida 83.4 108.5 30% 

Antofagasta Minerals 94.7 107.8 14% 

Collahuasi - - - 

Anglo American - - - 

Spence - - - 

El Abra - - - 

Zaldívar 104.0 125.0 20% 

Candelaria - - - 

Cerro Colorado - - - 

Quebrada Blanca - - - 

Lomas Bayas - - - 

In cents of dollar per pound 

Simple Average 96.10 109.88 14% 

Weighted Average 95.30 103.89 9% 



companies. 

Only four of the twelve companies reported information 

about their unit costs - cash cost or C1 -, during the first 

quarter. 

The state-owned company Codelco showed a moderate 

reduction in this indicator due to a higher discount for 

credits generated by the by-products of copper production- 

mainly molybdenum. It should be pointed out that in the 

case of Codelco, unlike other companies, unit costs include 

refining costs, which makes direct comparisons with other 

companies impossible. 

The other three companies showed significant increases 

in unit costs. This situation is due to greater technical 

difficulties in ore extraction, lower grades, higher costs of 

energy and certain key inputs like sulfuric acid. 

In the case of Minera Escondida, the increase in unit costs 

was amortized by a higher credit for by-products –gold and 

silver-, that totaled US$ 69.2 million in the first quarter of 

2011 (+US$ 10.6 million, +18% than in 2010). 

Unit costs reported for Antofagasta Minerals rose during 

the period, although the evolution was not the same at the 

operations level. Esperanza reported direct costs of 144.9 c/ 

lb (in March they were 102.7 c/lb), which are expected to 

drop in the second quarter as operations reach the design 

level. At Los Pelambres direct costs were significantly lower 

than in the same period of 2010 (22.8 c/lb, -23%) reaching 

75.2 c/lb, while at El Tesoro direct costs rose from 192.8 c/ 

lb to 195.2 c/lb in the first quarter. Michilla had direct costs 

that were 4.3% higher than 2010, reaching 192.2 c/lb in the 

first three months of 2011. 

23

24 

GRAPH 10.1 

OPERATING COSTS PER M.T. 

8000 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

GRAPH 10.3 


In dollars per M.T. ( prod. over 1 million M.T) 

Codelco Minera Escondida 


Securities and Insurance Commission by the companies and information reported by Cochilco. 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4T09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

GRAPH 10.2 




In dollars per M.T. (prod. between 350 thousand and 1 million M.T.) 

In dollars per M.T. (prod. between 100 thousand and 350 thousand M.T.) GRAPH 10.4 

In dollars per M.T. (prod. up to 100 thousand M.T.) 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4T09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

Spence 

El Abra Zaldívar Candelaria 



8000 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4T09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

Antofagasta Minerals Anglo American Chile Collahuasi 




7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4T09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 



Securities and Insurance Commission by the companies and information reported by Cochilco.



GRAPH 11 

AGGREGATE PROFITS OF 

COMPANIES REPORTED 

$ 20,000 

$ 18,000 

$ 16,000 

$ 14,000 

$ 12,000 

$ 10,000 

$ 8,000 

$ 6,000 

$ 4,000 

$ 2,000 

$ 0 

17,974 

3,074 

18,647 

3,575 

11,443 

5,404 

9,996 

1,093 

In millions of US$ at current value 

15,175 

3,282 

4,219 

2006 2007 2008 2009 2010 1T 2011 

annual 1st quarter 



Total profits recognized in the first quarter for the 

companies included in this report were significantly higher 

in comparison with last year as a result of the evolution of 

the companies’ income and expenses. The first three months 

showed the second best results for a first quarter since 2006, 

totaling approximately US$ 4.2 billion in profits. 

The profits of the copper-producing companies for the 

quarter were approximately US$ 4 billion, and if Codelco’s 

comparable profit is included, they were approximately US$ 

5 billion, which is a 25% increase in the case of the former 

and 30% for the latter. 

Individually, Codelco showed a 175% increase in profits for 

the period, due to an increase in income that far exceeded 

the increase in operating costs, as in previous quarters. This 

can be confirmed when observing the profits per M.T. of 

copper produced (graph 12.1), which have grown from the 

first quarter of 2010 to date. 

Candelaria, which belongs to Freeport and Sumitomo, had 

the second largest year-on-year increase in profits. The 

company’s operating costs have grown more moderately 

than production which, in addition to the higher copper 

price, permitted net profits per M.T. produced to be higher 

than the same period of 2010. Zaldivar, Cerro Colorado and 

Lomas Bayas also benefited from the good prices, and all of 

them saw their profits increase over 40% year-on-year. 

The companies that belong to Antofagasta Minerals showed 

a 20% increase in net profits in the first quarter. Profits at 

Los Pelambres increased 24.6%, reaching US$ 454 million, 

which represents 85% of Antofagasta’s net profits. El 

Tesoro generated 10.4% more profits than in the first quarter 

of 2010, while Michilla had the best relative performance, 

generating net profits of US$ 31 million, 95% more than in 

2010. Minera Esperanza showed losses of US$ 23.4 million 

in its first individual income statement. 

The profits of Escondida barely increased 0.4% year-onyear, 

due to the fact that operating costs (+17%) grew 

proportionally more than income in the period (+7%). This 

conjunction of elements had a moderate impact on net 

profits per M.T. of copper produced (indicator reported in 

graph 12.1) due to lower production in the first quarter. 

In the same period Anglo American showed a 3% year-onyear 

increase in net profits, mainly influenced by the high 

copper price, which helped to mitigate the effect of the lower 

volume of copper produced at its operations Norte and Sur 

(-8.6% compared with 2010). 

The three companies that suffered a setback in profits 

– Collahuasi, El Abra and Quebrada Blanca – had lower 

production levels compared with the same period in 2010. 

Except for El Abra, this had a stronger impact on the 

companies’ income than on their operating costs, which 

was reflected in the operating profits per M.T. of copper 

produced that fell at Collahuasi (graph 12.2) and Quebrada 

Blanca (graph 12.4), while it had a positive impact for El 

Abra (graph 12.3). 

Results of the big companies that produce minerals other 

than copper and industrial chemicals, reported quarter to 

25

26 

quarter in this report, showed an aggregate increase of 136% 

in net profits for the period compared with 2010, making it 

their best first quarter since this report has been issued. 

The result is heavily influenced by the performance of CAP, 

whose quarterly profits grew 351% in one year, totaling US$ 

121 million, driven by an increase in company sales, both 

physical and in value, in addition to a moderate increase 

in operating costs. CAP attributed the driver behind these 

results to be the increase in iron ore prices in the first quarter 

of 2011, as well as improvements in operations as a result of 

the merger of Compañía Minera del Pacífico and Compañía 

Minera Huasco, both CAP subsidiaries. 

In the case of Molymet, the price of molybdenum oxide 

increased 7.7%, and the price of ferromolybdenum increased 

5.9% between the first quarter of 2010 and 2011; therefore, 

despite the fact the company did not report any production 

information for the period, it may be inferred that the profits 

recognized in the first quarter responded to an increase in 

production. 

SQM also showed an important increase in net profits, 

reaching US$ 112 million, the highest figure for a year start 

and the best quarter for the company since the first edition 

of this report. According to information published by the 

company, operating costs grew 17%. Income in the vegetal 

nutrition segment increased 33.4%, and it increased 49.2% 

from the sale of iodine and by-products. Income from the 

sale of lithium and by-products increased 24%, and sales of 

industrial chemicals increased 22%, while potassium did not 

show any change. 

TABLE 13 

FISCAL YEAR PROFIT 

COMPANY 2010 



1Q 

2010 

1Q 

2011 

Var % 

Codelco (SVS)* 1,876 267.1 267.1 175% 

Codelco (Comparable 

Net Profit)** 

4,610 984.0 984.0 87% 

Minera Escondida 4,338 1,025.9 1,025.9 0.4% 

Antofagasta Minerals 1,898 443.5 443.5 20% 

Collahuasi 2,048 578.5 578.5 -22% 

Anglo American 1,449 336.0 336.0 3% 

Spence - - - - 

El Abra 483 132.9 132.9 -25% 

Zaldívar 529 125.4 125.4 42% 

Candelaria 542 82.6 82.6 128% 

Cerro Colorado 230 55.4 55.4 49% 

Quebrada Blanca 259 87.8 87.8 -35% 

Lomas Bayas 218 37.4 37.4 77% 

Total with 

Codelco* 

Total with 

Codelco** 


13,871 3,172 3,960 25% 

16,605 3,889 5,068 30% 

CAP 822.2 26.9 121.4 351% 

SQM 387.3 76.9 112.1 46% 

Molymet 93.9 5.8 24.7 328% 

Total 1,303 110 258 136% 



companies. 

Notes (*) Fiscal year profit reported at the Securities and Insurance Commission. 

(**) Comparable Net Profit published by Codelco. It is the result it would have had if it paid the 

same income tax as private companies (17%).



GRAPH 12.1 

PROFIT PER TON 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

-1,000 

-2,000 

-3,000 

-4,000 



GRAPH 12.3 


6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

-1,000 

-2,000 

-3,000 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

Minera Escondida Codelco (Comparable net profit) Codelco (SVS Profit) 

In US$ per M.T. (prod. over 1 million M.T.) GRAPH 12.2 

In US$ per M.T. (prod. between 350 thousand and 1 million M.T.) 

In US$ per M.T. (prod. between 100 thousand and 350 thousand M.T.) 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 





7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

-1,000 

-2,000 

-3,000 

-4,000 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 



GRAPH 12.4 


8,000 

6,000 

4,000 

2,000 

0 

-2,000 

-4,000 

Antofagasta Minerals Collahuasi Anglo American Chile 

In US$ per M.T. (prod. up to 100 thousand M.T.) 

1Q07 

2Q07 

3Q07 

4Q07 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

1Q10 

2Q10 

3Q10 

4Q10 

1Q11 

El Abra Zaldívar Candelaria Spence 



27

28 

TABLE 14 

INCOME STATEMENT TAX 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Codelco 2,612 713.0 1.213.0 70% 

Minera Escondida 1,297 257.1 273.6 6% 

Antofagasta Minerals 565 113.8 192.6 69% 

Collahuasi 614 148.2 150.8 2% 

Anglo American Chile 304 89.8 105.6 18% 

Spence - - 65.0 - 


El Abra 138 33.4 22.8 -32% 

Zaldívar 174 32.0 52.5 64% 

Candelaria 155 21.0 60.8 190% 

Cerro Colorado 61 14.2 27.5 94% 

Quebrada Blanca 69 21.3 17.1 -20% 

Lomas Bayas 62 9.5 22.1 133% 

Total 6,050 1,453 2,203 52% 

CAP 181 6.2 52.9 752% 

SQM 106 20.7 39.0 88% 

Molymet 22 10.4 7.8 -25% 

Total 309 37.3 99.6 167% 



companies. 



Due to the good results in the mining industry, income tax 

collection reached approximately US$ 2.3 billion when the 

amounts recognized by the fifteen companies included in 

this report are added together. 

When the companies are considered separately according 

to their main activity, copper mining added approximately 

US$ 2.2 billion to tax revenues, while companies dedicated 

to other minerals added an additional US$ 99.6 million. 

The tax pattern at the company level is in line with the pattern 

of net profits earned during the period, except for Molymet, 

whose year-on-year decrease in income tax is a result of 

adjustments in tax expenditure of US$ 7.6 million that took 

place in 2010. Without that adjustment, the expenditure 

would have been US$ 2.7 million, using the legal rate. 

Codelco is the company that contributed the largest 

amount of resources to the state in income tax, with a total 

of approximately US$ 1.2 billion, followed by Minera 

Escondida with US$ 273.6 million. The rest of the companies 

showed figures below US$ 200 million in that period. 

As Codelco belongs to the Chilean State, it is subject to 

a special regime whereby the company’s contributions to 

the state coffers included, in addition to the approximately 

US$ 1.2 billion mentioned above, withholding for the 

reserved copper law of US$ 368 million, plus US$ 734 

million in income, whereby the company’s total surplus was 

approximately US$ 2.3 billion in the first quarter of 2011.



TABLE 15 


RESERVES FOR SPECIFIC MINING TAX 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Codelco 278 66 140 112% 

Minera Escondida 298.5 50.2 87.6 74% 

Antofagasta Minerals 148.2 18.0 62.3 247% 

Collahuasi 148.2 29.1 49.9 71% 

Anglo American Chile 67.1 15.2 26.2 72% 

Spence - - 45 - 

El Abra 32 7.1 2.3 -67% 

Zaldívar 43.8 5.8 9.7 67% 

Candelaria 36.8 3.6 34.4 842% 

Cerro Colorado 10.4 2.2 7.5 236% 

Quebrada Blanca 16.6 4.1 2.8 -31% 

Lomas Bayas 14.1 1.9 5.4 191% 

Total 1,094 203 473 133% 



companies. 

Notes The companies have different reserve policies so the reserve account for the specific 

mining tax may show very relevant variations among companies throughout the tax period. 

Because of this, public information serves as a reference, and it does not represent a basis 

of comparison of the actual amount of tax among companies. Considering that the purpose 

of monthly provisional payments (PPM) is to comply with payment of taxes for the respective 

tax year, the fact of not having monthly provisions does not signify non-payment of taxes. The 

rate for calculating monthly provisional payments varies according to the provisional payments 

made and the gross income of the previous fiscal year. 

As we explained in the previous report, the specific mining 

tax was affected by the temporary modification of the tax 

rate applied to the operating income of mining companies 

that extract copper. 

The structure that is in effect and will remain invariable 

until 2023 provides for a variable tax rate of 4% to 9% until 

2012, which will decrease to 5% between 2013 and 2017. 

The rate will then vary between 5% and 14%. Regardless of 

the foregoing, the amount reported as reserve for specific 

mining tax or royalty is defined by company management, 

and it may defer payment of this tax. 

Notwithstanding the above, the mining companies showed 

an important increase in the amount set aside in reserve for 

this tax, which is included in the income tax expenditure 

declared on the income statement that is summarized in 

Table 15. 

In the first quarter the companies included in the report 

reserved US$ 473 million for the royalty, more than double 

the amount in 2010, which was US$ 203 million. 

29

30 

TABLE 16 

RETURN ON EQUITY 

COMPANY 

1Q 

2010 

Profit / Shareholders Equity 

1Q 

2011 

Var % 

Codelco (SVS)* 0.05 0.15 199% 

Codelco (Comparable Net Profit)** 0.19 0.38 103% 

Minera Escondida 0.19 0.19 0% 

Antofagasta Minerals 0.13 0.12 -6% 

Collahuasi 0.17 0.12 -30% 

Anglo American 0.11 0.09 -11% 

Spence - 0.07 - 

El Abra 0.11 0.07 -34% 

Zaldívar 0.11 0.13 21% 

Candelaria 0.09 0.15 64% 

Cerro Colorado 0.03 0.03 33% 

Quebrada Blanca 0.30 0.19 -36% 

Lomas Bayas 0.04 0.06 39% 

Average with Codelco* 0.12 0.12 -4% 

Average with Codelco** 0.13 0.13 1% 

CAP 0.02 0.04 122% 

SQM 0.05 0.06 26% 

Molymet 0.01 0.03 183% 

Total 0.03 0.05 70% 



companies. 

Notes (*) Fiscal year profit reported at the Securities and Insurance Commission. 

(**) Comparable Net Profit published by Codelco. It is the result it would have had if it paid the 

same income tax as private companies (17%). 

The average return of the copper industry in Chile has not 

changed significantly in the last year. 

For copper-producing companies, and taking the profits 

Codelco declared to the Securities and Insurance Commission 

into account, the average ROE was 12% in the first quarter 

of 2011, which is slightly less than it was in 2010; on the 



other hand, when taking Codelco’s comparable net profit (as 

if it paid the same taxes as private companies) into account, 

the return on equity was 13% in the period. 

At the company level, Codelco showed the highest relative 

increase, tripling the value of the indicator year-onyear 

and also showing the highest ROE, when taking the 

company’s comparable profit into consideration. This figure 

should be observed cautiously, because of the company’s 

undercapitalization due to the legal restrictions under which 

it operates. 

The biggest relative drops were attributed to Quebrada 

Blanca, El Abra and Collahuasi, which were in line with their 

production results during the quarter. Production results also 

explain the increase in return shown by Candelaria, Lomas 

Bayas and Cerro Colorado. 

The companies included in this report that produce other 

minerals showed an average 5% return on equity in the 

quarter, which is a 70% improvement over the same period 

in 2010. Molymet led the rise in the indicator, but SQM was 

the company with the best absolute performance. 

The debt of mining companies that produce copper, measured 

as the ratio between total liabilities and assets, showed a 

significant increase at the end of one year. 

In the first quarter of 2011 debt reached 30% of assets, versus 

26% of assets in the same period of 2010. This increase 

can be explained by an improvement in the companies’ 

prospects for the future, which has encouraged them to take 

on important investment projects that, according to CESCO 

research, will total US$ 75.5 billion over the next years. 

Individually, the three companies that showed higher 

increases in the percentage of debt are Collahuasi, 

Antofagasta Minerals, and Minera Escondida, with increases 

of 69.2%, 66.9% and 21.8% respectively. 

The debt level shown, which is above the average of the 

companies reported, is a result of the companies’ growth 

plans. Antofagasta Minerals has just started the operation of 

Esperanza, one of the most emblematic projects developed



TABLE 17 

DEBT RATIO 

COMPANY 1Q 2010 1Q 2011 Var % 

Codelco 0.70 0.77 9.8% 

Minera Escondida 0.28 0.34 21.8% 

Antofagasta Minerals 0.30 0.50 66.9% 

Collahuasi 0.29 0.49 69.2% 

Anglo American Chile 0.23 0.22 -7.5% 

Spence - 0.16 - 


El Abra 0.15 0.16 5.6% 

Zaldívar 0.19 0.21 8.6% 

Candelaria 0.22 0.23 3.4% 

Cerro Colorado 0.07 0.08 7.6% 

Quebrada Blanca 0.31 0.32 3.4% 

Lomas Bayas 0.15 0.17 12.6% 

Average 0.26 0.30 14.9% 

CAP 0.53 0.45 -14.3% 

SQM 0.49 0.49 -0.2% 

Molymet 0.54 0.47 -13.3% 

Average 0.52 0.47 -9.5% 



companies. 

in Chile in the last few years, and it also aspires to become an 

international player. Collahuasi has started the development 

of phase III of a project that it expects will enable the 

company to increase production above the million M.T. of 

copper produced annually. 

The mining companies’ liquidity, measured by the acid 

test, has regressed 16% in the case of copper mining and 

increased 6.7% for companies that extract other minerals. 

In the case of Collahuasi, lower production reduced the 

capacity to create cash flows, driving the indicator down 

47.7% year-on-year, followed by Minera Escondida which 

was affected by the same conditions. 

TABLE 18 

ACID TEST 

(Current Assets - Stock) / Current Liabilities 


Codelco 0.76 0.82 7.4% 

Minera Escondida 2.31 1.33 -42.3% 

Antofagasta Minerals 2.86 1.67 -41.5% 

Collahuasi 3.29 1.72 -47.7% 

Anglo American Chile 2.07 1.70 -17.6% 

Spence - 5.17 - 

El Abra 4.60 2.79 -39.4% 

Zaldívar 3.67 4.21 14.7% 

Candelaria 2.74 3.25 18.7% 

Cerro Colorado 22.89 19.61 -14.3% 

Quebrada Blanca 2.40 1.71 -28.7% 

Lomas Bayas 1.18 0.68 -42.1% 

Average 4.43 3.72 -16.0% 

CAP 1.70 1.61 -5.0% 

SQM 2.57 2.32 -9.7% 

Molymet 1.48 2.19 48.7% 

Average 1.91 2.04 6.7% 



companies. 

Lomas Bayas, unlike the companies mentioned above, 

increased production in this period, but showed a drop 

mainly due to an increase in liabilities arising from taxes 

and accounts payable for projects that had not been invoiced 

at the close of the quarter. 

Codelco showed a significant improvement in the liquidity 

indicator, although it still shows a lower level than the unit, 

which is a value that is considered a reference in the short 

term. 

31

32 

COPPER MINING INDUSTRY 

IN PERU 

TABLE 19 

COPPER PRODUCTION 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Southern Perú 334.4 78.1 67.1 -14% 

Antamina 325.0 75.8 81.0 7% 

Cerro Verde 312.3 77.1 81.9 6% 

Tintaya 93.0 22.3 21.7 -3% 

Gold Fields La Cima 43.7 12.1 10.1 -17% 

Milpo 22.3 5.4 6.4 19% 

El Brocal 18.3 2.6 7.5 187% 

Total Companies 1149 273 276 1% 

Total Perú 1247 295 301 2% 

Share 92% 93% 92% -1% 

Accumulated at quarter in T.M.T. GRAPH 13 

Source Prepared by Cesco based on information about the period reported by the companies 

to the Comisión Nacional Supervisora de Empresas y Valores (CONASEV), Ministry of Energy 

and Mines of Peru (MEM), and Cesco for this report. 

The mining industry in Peru produced 1,247 T.M.T. of 

copper last year according to figures reported by the 

Ministry of Energy and Mines (MEM) of Peru in its 2010 

annual report. On the basis of these results, Peruvian copper 

mining was the second largest in the world at the country 

level as indicated by the U.S. Geological Survey (USGS), 

only surpassed by Chile. 

During the first quarter of 2011, mining companies reported 

copper production of 276 T.M.T., which represents a meager 

increase of 1% compared to the first quarter of 2010. On 

a national level, Peruvian mining produced 301 T.M.T. of 

copper, 2% more year-on-year, signifying the companies 

included in the report had a 92% share of the country’s total 

production. 




210% 

160% 

110% 

60% 

10% 

-40% 

187% 

El Brocal 

19% 

Milpo 

7% 6% -3%- 14% -17% 

Antamina 

Cerro Verde 

Tintaya 

% Var. 1Q 2011/1Q 2010 

Southern Peru 

Gold Fields 

Source Prepared by Cesco based on information about the period reported by the companies to 

the Ministry of Energy and Mines of Peru (MEM) . 

At the company level, Southern Peru, the mining subsidiary 

in Peru of Grupo México and the largest copper producer 

in the country in 2010, reported copper production of 67 

T.M.T. in the first quarter of 2011, a 14% drop compared 

with the same period the previous year. This result can 

be explained largely by the lower levels of production at 

Cocotea, Cajon and Tot oral, with drops of 3.4 T.M.T., 6.3 

T.M.T., and 9.1 T.M.T. respectively, which were partially 

offset by Toquepala and Cimarron, where production 

increased 2.9 T.M.T. and 5.1 T.M.T., respectively. 

Compañía Minera Antamina, controlled by BHP Billiton, 

had better results, increasing production for the period by 

7% to reach 81 T.M.T., especially driven by the production 

declared in March when it increased 26% compared to 

March 2010. 

Cerro Verde, which was the 3rd largest copper producer 

in the country last year, maintained its production at a 

slightly higher level than the previous quarter, producing 

81.9 T.M.T. of copper in the first three months of the year 

which, compared with 77.1 T.M.T. last year, represent a 6% 

increase.



Xstrata Tinted showed a slight drop of 3% this quarter 

compared with the same period in 2010, although the 

decrease is bigger when compared with the fourth quarter 

in 2010 when the company’s production was 28.4 T.M.T. 

of copper concentrate. 

Gold Fields La Cyma, an indirect subsidiary of the 

South African Gold Fields Ltd., which started to produce 

concentrate in 2008, showed the largest relative drop in 

copper production in this period. Its production of 10.1 

T.M.T. of copper in the first quarter of 2011 was 17% lower 

than last year, although it maintained its position on the table 

of the largest producers in Peru. 

Milo, which has been controlled by the Brazilian Votorantim 

Metais since 2010, continued to show a positive trend, 

producing 6.4 T.M.T. this quarter, 19% more than in the 

same period of 2010 and 12% more than the previous 

quarter, when it produced 5.7 T.M.T. The company hopes 

to continue along this path by implementing a new leaching 

method called Chapilix©, which should enable it to improve 

productivity and reduce costs this year. 

The positive results shown by El Brocal are a consequence 

of the expansion of their operations, which bore its first fruit 

in October 2010, when the company rose from producing 

about 0.9 T.M.T. per month to 3 T.M.T. per month in 

the fourth quarter of 2010. In the first quarter of 2011 the 

company produced 7.5 T.M.T., which was a 187% increase 

over the first quarter of 2010. 

TABLE 20 

OPERATING COSTS 

COMPANY 2010 

1Q 

2010 

1Q 

2011 

Var % 

Southern Perú 1,279.1 325.2 478.9 47% 

Antamina - - 127.5 - 

Cerro Verde 704.5 186.8 219.0 17% 

Tintaya - - 73.5 - 

Gold Fields La 

Cima 


222.8 50.4 66.6 32% 

Milpo 166.0 37.8 44.7 18% 

El Brocal 121.5 25.6 46.6 82% 

TOTAL 92% 93% 92% -1% 


to the Comisión Nacional Supervisora de Empresas y Valores (CONASEV) and to Cesco for this 

report. 

The operating costs of the biggest Peruvian companies 

that produce copper have progressed according to the 

general trend in the copper industry, accumulating a total 

of approximately US$ 1 billion so far this year. Deducting 

the costs of Antamina and Tintaya, for which no information 

on the first quarter of 2010 is available, operating costs 

increased 37% year-on-year, although production barely 

increased 1%. 

El Brocal showed an important year-on-year increase in 

operating costs of 82%, mainly due to the sales cost item. 

This situation resulted from the company’s leap in scale of 

production in the fourth quarter of 2010. 

Southern Perú saw its operating costs grow from US$ 325.2 

million in the first quarter of 2010 to US$ 478.9 in the same 

period of 2011, showing the largest absolute and relative 

increase of any of the companies included in the report. The 

company stated that this result is mainly due to an increase 

in sales costs, which have grown because of the higher value 

of concentrate purchased, an increase in the costs of energy 

and other inputs, and higher labor costs. 

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TABLE 21 


COMPANY 

4Q 

2010 

1Q 

2011 

Var % 

Southern Perú 4.12 7.14 73.2% 

Antamina - 1.57 - 

Cerro Verde 2.39 2.67 11.9% 

Tintaya - 3.39 - 


Cima 

In thousands of US$ per M.T. 

7.03 6.60 -6.1% 

Milpo 8.06 6.94 -13.9% 

El Brocal 4.01 6.24 55.6% 

PROMEDIO 93% 92% -1% 

Source Prepared by Cesco based on information of the period reported by the companies to 

the Comisión Nacional Supervisora de Empresas y Valores (CONASEV) and to Cesco for this 

report. 

Operating costs of Gold Fields La Cima grew 32% this 

quarter to reach a total of US$ 66.6 million driven by sales 

costs, while operating costs at Compañía Minera Milpo grew 

in line with the increase in production levels in this quarter. 

Operating costs of Cerro Verde were 17% higher than 

2010 in this period, driven by an increase in the value of 

raw materials and inputs acquired, energy, and direct labor, 

which were 13%, 30% and 20% higher, respectively, than 

2010. 

A significant increase can be seen in the operating costs per 

M.T. of copper produced in the fourth quarter of 2010 and 

the first quarter of 2011 for the group of companies being 

analyzed. On the average, operating costs per M.T. of copper 

produced were US$ 4,940, an increase in cost of US$ 1,280 

compared with the previous quarter. 

This situation is a reflection of the conditions that underlie 

the increase in operating costs, including energy costs, an 

increase in the price of raw materials and strategic inputs, as 

well as higher labor costs. 



The mining companies whose costs grew the most were 

Southern Perú and Compañía Minera El Brocal. In the case 

of Southern Perú the increase took place in the context of 

a reduction in production, while in the case of El Brocal 

total operating costs grew more than production in the first 

quarter of 2011. 

During the first quarter, income reported by the mining 

companies in Peru included in this report totaled 

approximately US$ 3.1 billion, while total profits were 

approximately US$ 1.3 billion. 

When comparing only companies with information for 

previous periods, we can see that income increased from 

approximately US$ 1.5 billion in the first quarter of 2010 to 

approximately US$ 1.9 billion in the same period of this year, 

which is a 30% increase. Following the same procedure, net 

profits were US$ 756 million, which is the equivalent of a 

year-on-year increase of 27%. These results are in line with 

the increase in the average price of copper and other relevant 

minerals for the companies in the report. 

Cerro Verde had a year-on-year increase of 39% in income, 

due to a higher copper price and a moderate increase in 

production which, despite the increase in operating costs, 

enabled profits to grow 52% compared with the first quarter 

of 2010, reaching US$ 367.7 million. 

The mining company El Brocal increased its income 

significantly to US$ 76.2 million, which is 102% higher 

than the first quarter of 2010. Better conditions in the copper 

market reinforced this result, which enabled the company to 

record profits of US$ 23.4 million, a 119% increase over the 

same period in 2010. 

Milpo increased its income in a higher proportion than the 

other companies, due to a larger increase in production and 

better conditions in the market of copper and other metals 

the company has interests in. These conditions favored the



TABLE 22 

INCOME AND PROFITS 

INCOME PROFITS 

COMPANY 2010 

1T 

2010 

1T 

2011 

Var % 2010 

1T 

2010 

1T 

2011 

Southern Perú 3,153.5 721.8 839.3 16% 1,208.0 277.9 239.3 -14% 

Antamina - - 1,025.1 - - - 498.6 - 

Cerro Verde 2,369.0 534.1 740.9 39% 1,054.4 241.3 367.7 52% 

Tintaya - - 139.9 - - - 47.7 - 


Cima 

477.6 110.8 159.4 44% 156.5 33.3 68.6 106% 

Milpo 382.4 85.4 119.9 41% 129.7 30.9 57.0 84% 

El Brocal 219.2 37.8 76.2 102% 72.3 10.7 23.4 119% 

Var % 

TOTAL 6,601.7 1,489.9 3,100.7 108% 2,629.9 594.1 1,302.3 119% 

Source Prepared by Cesco based on information about the period reported by the companies to the Comisión Nacional Supervisora de Empresas y Valores (CONASEV) and Cesco for this report. 

generation of profits, which totaled US$ 57 million in the 

first three months of the year. 

Gold Fields La Cima showed a 44% year-on-year increase 

in income, despite lower copper production in the first 

quarter of 2011. This situation was due to an increase in 

the price of copper and gold, which is a relevant product for 

the company, whose annual production made it the seventh 

largest Peruvian producer of that mineral in 2010. Gold 

Fields’ profits for the period were US$ 68.6 million, with a 

year-on-year increase of 106%. 


The biggest variations were in Milpo and Gold Fields La 

Cima, which also showed the best indicator in absolute 

terms, although they were influenced by the profits resulting 

from gold extraction by the two companies. 

Southern Perú’s income were in line with its production for 

the period, a situation that was partially offset by a better 

price scenario than in 2010. That price was not sufficient, 

however, to compensate for the increase in the company’s 

operating costs, which led to a 14% reduction in the 

company’s profits in the first quarter of 2011. 

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TABLE 23 

NET PROFIT PER METRIC TON OF 

COPPER PRODUCED 


Southern Perú 4.44 3.57 -19..7% 


Cerro Verde 4.69 4.49 -4.2% 



Cima 

In thousands of US$ per M.T. 

4.59 6.80 48.2% 

Milpo 5.53 8.86 60.2% 

El Brocal 3.50 3.13 -10.5% 

PROMEDIO 3.25 5.03 54.8% 


to the Comisión Nacional Supervisora de Empresas y Valores (CONASEV) and Cesco for this 

report. 

Table 23 shows the variation in net profit obtained for each 

M.T. of copper produced. On the average, profits were US$ 

5,030, showing an important increase compared with the 

last quarter of 2010, which was the equivalent of 54%. 

Antamina also had a noteworthy result, obtaining US$ 6,150 

per M.T. of copper produced, although this was influenced 

by the inclusion of silver in its statement of financial results. 

The companies focused on copper saw their margins drop 

because of an increase in operating costs that was more than 

proportional. This situation made Southern Perú experience 

a drop of US$ 870 in profit per M.T., equivalent to 19.7%, 

while Cerro Verde recorded a drop in its profit of US$ 200 

per M.T., which was 4.2% less than in 2010. 

In the case of El Brocal, the 10.5% drop in profit per 

M.T. of copper was due to the fact the company expanded 

its production substantially in the fourth quarter, taking 

operating costs per M.T. to a new scale, which pushed 

margins down during that quarter compared with last year. 



Return on capital, measured as the ratio between Profits and 

Shareholders Equity (ROE), experienced on the average 

a year-on-year increase of 40.8%, meaning that for every 

dollar invested 0.13 dollars were obtained in profits. This 

figure is substantially higher than the result indicated for the 

world industry, which reported an ROE of 0.9 for the first 

quarter of 2011. 

Antamina is noteworthy at the company level with an ROE 

of 28% for the first quarter of 2011, which is by far the 

highest indicator for the group of companies included in the 

report. Cerro Verde also showed an important increase in the 

indicator, although slightly lower than Antamina. Despite 

maintaining a similar level of equity (approximately US$ 

1.8 billion for Antamina and approximately US$ 1.9 billion 

for Cerro Verde), Cerro Verde has significantly lower total 

assets (approximately US$ 3.3 billion for Antamina and 

approximately US$ 2.7 billion for Cerro Verde). 

El Brocal, whose ROE was significantly lower in comparison 

with other companies, showed a remarkable year-on-year 

increase of 87.7%. This performance was also noteworthy 

because the company financed an important increase in its 

assets with debt and equity during this period, but due to the 

extraordinary profits reported in this quarter it obtained an 

ROE of 7% in this period. 

Gold Fields showed a higher return on capital over last year, 

although it was slightly below the average for the companies 

included in this report. The significant increase in profits 

was partially mitigated by the 29% increase in net worth, 

which enabled the company to reduce its debt. 

There have not been any important changes in the debt of 

mining companies in Peru since the first quarter of 2010, 

showing that the companies’ assets are mostly financed with 

equity, but the proportion of liabilities to assets was reduced 

by 4% in the first three months of 2011. 

It is also interesting to note that this proportion is significantly 

lower on the average than it is for mining companies 

worldwide, which maintained a proportion of 0.44 total 

liabilities to total assets in this quarter.



TABLE 24 

RETURN ON CAPITAL 


Southern Perú 0.14 0.12 -17.1% 


Cerro Verde 0.14 0.19 30.9% 



Cima 

0.05 0.09 60.5% 

Milpo 0.07 0.10 49.7% 

El Brocal 0.04 0.07 87.7% 

Average 0.09 0.13 40.8% 



report. 

In Peru, only Antamina approaches the average for companies 

worldwide, with a debt ratio of 0.44 in this period, while the 

indicator for the rest of the companies remained near the 

mean. 

Gold Fields La Cima and Milpo reduced their debt levels 

significantly. The former had a year-on-year variation 

of 28.6% and the latter 14.2%, whereas the debt ratio of 

Southern Perú evolved towards the average of the companies 

included in this report. 

Changes in the structures of the companies’ balance sheets 

had a negative impact on liquidity. The acid test, which 

reflects short-term payment capacity, dropped 12.9% in a 

year, from a proportion of liquid assets to current liability of 

2.16 in 2010 to 1.89 for the first quarter of 2011. 

This result is the consequence of an increase in current 

liability, which rose from US$ 925 million to approximately 

US$ 1.9 billion in the period reported, while current assets 

and stock had a similar evolution with both items increasing 

slightly more than 80% year-on-year. 

Profit / Shareholders equity TABLE 25 


DEBT 


Southern Perú 0.21 0.24 12.4% 


Cerro Verde 0.25 0.26 5.3% 



Cima 

0.46 0.33 -28.6% 

Milpo 0.30 0.25 -14.2% 

El Brocal 0.26 0.28 7.7% 

Average 0.30 0.28 -4.0% 



report. 

At the company level, the change in the value of the ratio for 

Southern Perú is the result of an increase in current liability, 

particularly accounts payable, which rose from US$ 138 

million at the end of the first quarter of 2010 to US$ 288 

million in the same period of 2011. 

The situation is different in the case of the change in ratio for 

El Brocal. There, the change is the result of a 264% increase 

in stock, in addition to a 32% increase in current liability for 

the period reported. 

Milpo was the company with the most important change, as 

well as the second highest value in this quarter. The reduction 

of 31% in current liability of the company is reflected in 

this value, while current assets and stock increased 40% 

year-on-year. 

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TABLE 26 

ACID TEST 

COMPANY 

4Q 

2010 

1Q 

2011 

Var % 

Southern Perú 2.34 1.37 -41.2% 


Cerro Verde 2.47 2.62 5.8% 



Cima 

(Current Assets - Stock) / Current Liabilities 

1.80 1.64 -8.7% 

Milpo 1.05 2.15 105.6% 

El Brocal 3.17 2.07 -34.% 

Average 92% -1% 



report. 


Number 11, 1st Quarter 2011



EDITOR’S NOTES: 

.The purpose of this report is to make more information available about the mining industry in Chile, Peru, and the world. 

It is written on the basis of public information from the mining companies themselves and other entities that report 

information on mining companies. Information is requested occasionally from companies directly when it is not available 

from public sources. 

.The report is published every quarter, which allows continuous, frequent analysis of the activity in the mining industry. It 

has been written with the utmost care to accurately reflect the real figures in the mining industry; however, Cesco is not 

responsible for any errors caused by the use of information in this report. 

.All figures expressed in US$. The acronym M.T. is used for metric tons and T.M.T. is used for thousands of metric tons. 

.The use of information contained in this report must mention the source, the Copper and Mining Studies Center CESCO. 

World Mining Industry 

.The criterion used to rank companies in the world mining industry is from highest to lowest income levels for the last 

accounting period, with the exception of production data, where highest to lowest levels of copper production have been 

used 1 . 

.Anglo American Plc, BHP Billiton, Kazakhmys, KGHM, Norilsk Nickel, Xstrata and Rio Tinto report financial information 

every semester. Antofagasta Plc, Codelco, First Quantum, Freeport McMoRan, Grupo México, Teck AND Vale report 

financial information on a quarterly basis. 

.KGHM Polska Miedz provide data in Zloty (PLN) so they are converted into US$ for comparison purposes. 

Mining Industry in Chile 

.The criterion used to rank companies in the Chilean copper mining industry is from highest to lowest levels of copper 

production in the last accounting year 

.As the production levels of Molymet, CAP and SQM are not comparable, the criterion used for the world mining industry 

was used, i.e. from highest to lowest income in the last accounting year. 

.The deadline for delivering financial information on mining companies to the Securities and Insurance Commission of 

Chile is 90 days from the end of the quarterly closing. As an exception, Chilean mining companies can provide data on 

the complete year-end closing 120 days after the annual closing. In addition, the companies that adopt the IFRS standards 

have an extension of 15 additional days 2 . 

1 At the close of this publication, Norilsk Nickel had not published their financial results for the second half of 2010. The company’s relative position 

in this report is based on historical information. 

2 Financial information from Spence for the first quarter of 2011 was provided to Cesco for this report. The company will start reporting its financial 

statements to the SVS (Securities and Insurance Commission) in the second quarter of 2011. 

39

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.This report has used consolidated financial information for the following companies: Codelco, Anglo American Chile, 

CAP, SQM and Molymet. In the case of Anglo American Chile, consolidated information on Anglo American Sur and 

Anglo American Norte was used up to the second quarter of 2009. 

.Individual financial information has been used for the following companies: Minera Escondida, Antofagasta Minerals, 

Doña Inés de Collahuasi, Minera Candelaria, Minera El Abra, Minera Zaldívar, Minera Cerro Colorado, Minera Quebrada 

Blanca and Minera Lomas Bayas. 

.Comparable Net Profit of Codelco was extracted from presentations of results given by Codelco at the end of each quarter. 

.All the results of Antofagasta Minerals for this report were prepared from individual information reported by Minera 

Esperanza, Minera Los Pelambres, Minera El Tesoro and Minera Michilla. 

Mining Industry in Peru 

.The criterion used to rank companies in the Peruvian copper mining industry is from highest to lowest levels of copper 

production in the last accounting year. 

.The delivery of financial information on companies to the National Supervision Commission of Companies and Securities 

(CONASEV) averages 30 days from the end of the quarter 3 . 

.Tables have been included instead of graphs for operating costs per M.T. and for profits per M.T. as historical data was 

less available. The information will be reported as it is for the Chilean mining industry in future publications of this report. 

3 Antamina and Tintaya are not subject to CONASEV requirements for information as they are not quoted on the stock exchange. The information 

on those mining companies has been provided directly to Cesco for this report.



CESCO Copper and Mining Studies Center drafted this report by: 

Juan Carlos Guajardo B., Executive Director, and 

Gabriel Rojas Sandoval, Analyst. 

Design: 

Mario Rojas 

Printing: 

Productora Gráfica Andros 

41

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Number 11, 1st Quarter 2011



The The Center Center of Copper of Copper and and Mining Mining Studies Studies - CESCO - CESCO 

appreciated the the support of: of: 

Center Center for Copper for Copper and Mining and Mining Studies Studies - CESCO - CESCO 

Telephone: Telephone: (56-2) (56-2) 4814300. 4814300. Fax: (56-2) Fax: (56-2) 4814301. 4814301. Address: Address: Las Urbinas Las Urbinas 53, office 53, 24, office Providencia, 24, Providencia, Santiago. Santiago. 

www.cesco.cl www.cesco.cl 

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