Santiago, 28 March 2014. In 2013, Codelco's total expenses dropped US$ 1.324 million from the previous year. This enabled the company to compensate most of the negative impact of lower copper and other product prices on operating results.

The Company's total pre-tax profit last year was US$ 3.889 billion, compared to US$ 4.014 billion in 2013; this figure excludes extraordinary gain on the acquisition of a stake in Anglo American Sur S.A. "To make valid comparisons between this and any other year, it is essential to isolate the business deal with Anglo American, which on its own meant an additional US$ 3.791 billion profit", Iván Arriagada, vice-president of Administration and Finance, explained.

In 2013, the average price of copper was 332.1 cents per pound, down 8 per cent from the average price in 2012. Molybdenum prices fell 19 per cent, Codelco's key by-product, to US$ 22.7 per kilogram. Prices for gold (-16%), silver (-24%) and sulphuric acid (-38%) also dropped.

As a result of lower copper prices, Codelco's profit dropped US$ 658 million in 2013 from the previous year, and an additional US$ 264 million due to dwindling by-product prices.

"Thanks to the efforts of workers, professionals and executives to reduce costs and increase production, in addition to other factors such as lower energy costs and a favourable exchange rate, we were able to mitigate the negative impact of lower prices on the Company's pre-tax profit," Mr Arriagada said.

Comparable profit (calculated by applying the same tax requirements as private-sector companies) was US$ 3.009 billion.

HIGHER OUTPUT

In 2013, Codelco's refined copper output totalled 1,792,000 tonnes, up 34,000 tonnes (2%) from 1,758,000 tonnes produced in 2012. This increase is due to higher copper output from Codelco's share in Anglo American Sur S.A. and El Teniente Division.

It was also the first time that Ministro Hales mine output, 30,000 tonnes, was included. This copper ore was delivered to the Chuquicamata concentrator during its start-up period.

Production at Codelco divisions, i.e., excluding its stake in El Abra and Anglo American Sur, was 1,622,000 tonnes, slightly lower than 1,647,000 tonnes in the previous year. "Our production goals were more ambitious, but because of different operating problems, we didn't reach expected production at some divisions," Mr Arriagada explained.

As for by-products, during the reporting period molybdenum output rose 17 per cent and silver 2 per cent. However, gold and sulphuric acid production fell.

LOWER COSTS

In 2013, Codelco's total expenses fell 12 per cent, totalling 231.5 cents per pound (c/lb) of copper, compared to an average 264.5 c/lb in 2012.

Net Cathode Cost (C3) dropped 10.2 per cent to 217 c/lb on average. This cost is based on LME price benchmark.

Codelco's Direct Cash Cost (C1) last year fell to 163.1 c/lb of copper, down 0.3 per cent from the average cost in 2012. C1 is the type of cost used as a benchmark by the global mining industry to compare efficiency. "What is important is that costs fell during the year and we have managed to maintain this trend in 2014", Iván Arriagada added.

This significant drop in costs in 2013, compared to 2012, is the result of Codelco's structural project focused on boosting production and controlling costs. The Company has promoted this project since the end of 2011. In fact, of the 1.324 million less in Total Expenses, US$ 482 million were saved as a direct result of this project. Other important factors were the impact of the exchange rate on liabilities in local currency (US$ 385 million) and lower energy and other supply costs (US$159 million).

LOWER COPPER SALES

Copper sales totalled US$ 12.021 billion in 2013, compared to US$ 12.792 billion in 2012, mainly due to tumbling copper prices.

During this period, copper sales revenue was US$ 8.299 million and gross profit was US$ 3,722 million.
A further US$ 433 million is added from by-product sales, which also evidences a strong decline compared to 2012, when sales totalled US$ 696 million (down US$ 263 million).

PRE-TAX DISTRIBUTION

The Company reported US$ 3.889 billion in pre-tax profit for 2013, distributed as follows:

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

ACCIDENT RATE

In 2013, Codelco had to regret 4 fatal accidents, 3 contractors and 1 employee.

Total accident frequency rate, which includes employee and contractors, was a record 1.26 in 2013, significantly lower than 1.35 rate in 2012.

Codelco will continue to strengthen its health and safety structural project in order to definitively eliminate accidents.

Communications Department