Chilean mining industry faces uneasy future

There is a growing concern about cost in the Chilean mining industry, according to the CFO of London-listed Chilean mining group Antofagosta.

The news comes amid worries about overall copper production in Chile, which recorded a down trend of almost eight percent year on year in January.

Hussein Barma at the Jefferies copper conference on Thursday said that sourcing skilled labour will be a key driver in the future. The CFO indicated that labour accounts for just over 10 percent of Antofagasta's total cost base but a limited pool of skilled stuff is already taking a toll on its operations. Both its projects in Caracoles and Telegrafo, which could potentially produce up to 150,000 tons of copper annually, were affected as a result of limited skilled labour.

Barma said Antofagasta is roughly four weeks away from completing negotiations with four contractors to establish the cost of developing its $1.3bn Antucoya project in Chile.

Antofagasta has recently undergone a management shakeup due to unsatisfactory production results, which saw the resignation of CEO Marcelo Awad and a reshuffle of several other managers.

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