By Olivia Kumwenda-Mtambo
(Reuters) - Chilean mining firm Antofagasta Plc (L:ANTO) will lift copper production less than some analysts had expected, sending its shares down more than 3 percent.
Like its peers, Antofagasta is battling with low commodity prices and slowing growth in top copper consumer China, forcing mining companies globally to cut spending in a bid to preserve cash. It has also been hurt by declining ore grades, unfavourable weather and environmental protests.
The company said it produced 630,300 tonnes of copper in 2015, down 10.6 percent from the previous year and less than its 635,000-tonne target.
It expects copper output of 710,000-740,000 tonnes in 2016 as it ramps up production at its Antucoya and Centinela Concentrates mines, as well as from its 50 percent share in Barrick Gold's (TO:ABX) Zaldivar mine. It bought the stake last year.
"Production guidance for 2016 came in significantly below the market's expectations," Macquarie analyst Alon Olsha said, without giving figures.
Three other analysts had expected production of between 733,000 and 750,000 tonnes for this year.
"Production guidance for 2016 is 12-16 percent below our prior forecast," Canaccord Genuity analysts said in a note.
Antofagasta shares were down 3.4 percent at 1047 GMT. They have fallen 22 percent since the start of 2016, making the company the second-worst performer on the blue-chip FTSE 100 (FTSE).
Benchmark copper on the London Metal Exchange has been steadily declining, and hit the lowest level since May 2009 earlier this month at $4,318 per tonne. It was trading around $4,532 on Wednesday.
High costs at the company's core Centinela operation were also of concern. The mine's cash costs before by-product credits for 2015 were 7 percent higher than in 2014 due to a decline in output, the company said.
"It suggests this asset is looking increasingly marginal, but could get relief if gold rallies due to the high by-product contribution," Investec analysts said in a note.
Antofagasta said group cash costs before by-product credits are expected to fall by 9 percent in 2016 to $1.65 per pound as output increases and it makes more savings.
Antofagasta last year commissioned the Antucoya mine, which is expected to reach full capacity of 85,000 tonnes per year in mid-2016.
Antofagasta, which is scheduled to release its annual financial results in March, was targeting savings of about $160 million last year including lower capital spending.
The company expects to produce 245,000-275,000 ounces of gold this year, up from 213,900 ounces in 2015.