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Anglo American starts commercial production at Quellaveco, tightens its 2022 copper guidance for Chile

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(Kitco News) - Global mining giant Anglo American (LSE: AAL) today announced the start of commercial copper operations at its Quellaveco project in Peru, following the successful testing of operations and final regulatory clearance.

The company said that Quellaveco is expected to produce 300,000 tonnes per year of copper equivalent volume on average over its first ten years.

According to the company’s statement, Quellaveco copper mine, located in the Moquegua region of Peru, is a world-class and cost-efficient mining operation. The construction of Quellaveco involved a substantial investment of more than $5 billion.

CEO Duncan Wanblad commented, "Our delivery of Quellaveco, a major new world class copper mine, is testament to the incredible efforts of our workforce and our commitment to our stakeholders in Peru over many years. Quellaveco alone is expected to lift our total global output by 10% in copper equivalent terms and take our total copper production close to 1 million tonnes per year.

"At a highly competitive operating cost, Quellaveco exemplifies the asset and return profile that is central to our portfolio quality and our ability to provide customers with a reliable and sustainable supply of future-enabling metals."

Anglo American expects that Quellaveco will ramp up fully over the next 9-12 months.

Importantly, the company noted that following a thorough commissioning and testing period, and receipt of final regulatory clearance, production guidance for Quellaveco in 2022 is revised to 80,000-100,000 tonnes of copper (previously 100,000-150,000) at a C1 unit cost of c.150c/lb, previously c.135c/lb.

However, Anglo American pointed out that its production guidance for Quellaveco in 2023 and 2024 is unchanged at 320,000-370,000 tonnes of copper.

In addition, the company announced that its production guidance for Chile is tightened to 560,000-580,000 tonnes of copper (previously 560,000-600,000 tonnes) due to lower throughput at Los Bronces caused by a combination of water restrictions and a change in ore characteristics.
2022 C1 unit cost guidance is revised to c.160c/lb (previously c.150c/lb), reflecting the impact of lower volumes and inflation, it added.

Anglo American is a leading producer of diamonds (through De Beers), copper, platinum group metals, the steelmaking ingredients of iron ore and metallurgical coal, and nickel - with crop nutrients in development and thermal coal operations planned for divestment.

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