Santiago, 27 May 2011.- Corporación Nacional del Cobre de Chile, Codelco recorded a pre-tax profit of US$ 2.315 billion in the first quarter of 2011, up 87% from US$ 1.237 billion for the same period 2010. This important increase is due to higher prices for copper and by-products sold by the company, higher production and a fall in operating costs.

Furthermore, this higher pre-tax profit is also because Codelco sold its stake in E-CL (formerly Edelnor). This is equivalent to US$ 380 million.

Comparable net profit (calculated by applying the same tax regime as private sector companies) totalled US$ 1.841 billion, which has enabled Codelco to once again have the highest profits than any other company operating in Chile.

RISE IN SALES AND PRODUCTION

During the first three months of 2011, Codelco sold 428,000 metric tonnes of fine copper (mtf); 371,000 mtf come from its own production and the rest from third parties. This means sales increased by 10,000 tonnes of copper compared to the prior year.

Codelco's production in the first quarter totalled 414,000 mtf, up 31,000 mtf over 2010. This is the result of improved ore grades, higher mineral recovery and enhanced operating continuity at some of its divisions.

Radomiro Tomic, Andina, Teniente and Salvador Divisions increased their production compared to 2010, which offset a lower production at Chuquicamata and Minera Gaby.

Production rises to 425,000 tonnes of fine copper in the first quarter if Codelco's stake in El Abra mine is included.

Molybdenum production also increased in 2,000 mtf, although sales remained the same as in 2010: 5,000 mtf. 

STRONG INCREASE IN GROSS PROFIT

Own copper sales revenue totalled US$ 3.58 billion in the first quarter of 2011, up from US$ 2.798 billion during the same period 2010.

The average LME copper price was US$437.5 per pound at 31 March of 2011. This represents a rise of US$108.9 per pound on the same period 2010, when it reached US$328.6 per pound.

Therefore, gross profit totalled US$ 1.962 billion during January-March 2011, compared to US$ 1.416 billion recorded during the same period 2010.

A further US$ 338 million have to be added to this gross profit for other revenues and expenses and $ 15 million for associated company results.

This implies that pre-tax profit Codelco delivered to the State rose to US$ 2.315 billion, US$ 1.078 million more than for the same period 2010.

PRE-TAX PROFIT

The Company's pre-tax profit was US$ 2.315 billion as at March 2011, which is distributed as follows:

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

EBITDA

As at 31 March 2011, EBITDA (defined as Net Profit plus Taxes, Finance Costs, and Depreciations and Amortizations) surged to US$ 2.75 billion from US$ 1.609 billion in 2010.

LOWER COSTS

KEY MARKETS

As for sales, China continues to be the main market with 35%, followed by Europe with 23%, the rest of Asia with 21%, North America with 12%, South America with 9% and Oceania with 1%.

The fall in demand in the Chinese market, down from 42% in 2010 to 35% in 2011, is the result of a slower demand in China; while higher sales to Europe, North America and the rest of Asia, such as Korea and Taiwan, are due to the dynamism of those markets post crisis. In the case of Japan, during the period reported, shipments increased before and especially after the earthquake.

REDUCTION IN TOTAL ACCIDENT RATE

During the first quarter 2011, Codelco reached unprecedented results on occupational safety. Codelco had a 1.58 accident frequency rate - it includes employees and contractors - in January-March 2011, down from the 2.41 rate for the same period 2010. However, in May Codelco had to regret the fatal accident of Dany Cruz Nogales, contractor at Chuquicamata Division.

Communications Department