Antofagasta's December quarter copper production was 178,900 tonnes, down by 1.2% quarter-on-quarter, due to lower water availability.

Full-year production was 721,500 tonnes, within the guidance range of 710,000-740,000t, and 1.7% lower than 2020.

Antofagasta restated 2022 copper production guidance of 660-690,000 tonnes of copper, as the effects of water shortages at Los Pelambres, and lower expected grades at Centinela Concentrates cuts output.

"However, we have a long-term solution to the water shortage which will come in the second half of the year when our desalination plant is commissioned," Antofagasta CEO, Iván Arriagada said on January 19.

Antofagasta in October 2021 warned of the growing impact of water shortages in the region. This problem is not expected to be resolved until the country's rainy season in July, and the completion of the desalination plant in the second half of 2022. Copper production is expected to increase quarter on quarter throughout 2022.

Molybdenum production in 2021 was 10,500 tonnes, 17% lower than in 2020 due to lower grades at Los Pelambres and Centinela

Gold production for the full year was 252,200 ounces, 24% higher than in 2020, thanks to higher grades at Centinela.

Antofagasta issued 2022 guidance for gold and molybdenum of 170-190,000oz, and 8-10,000oz respectively, with gold output hit by lower grades at Centinela.

And the company also warned of rising costs, as input prices increase.

Antofagasta's net cash costs before by-product credits in 2021 were $1.79/lb, 15% higher than 2020, as the stronger Chilean peso, higher energy and diesel prices, and lower production weighed.

Group cash costs in 2022 are guided to rise, with cash costs before by-product credits at to be $2.00/lb.

This is driven by increased input costs, especially sulphuric acid, the price of which is up 125% according to Antofagasta.

Lower production at Los Pelambres and Centinela Concentrates, the group's two lowest cost operations, will also weigh.

"Our unit costs will be temporarily affected by the decrease in production in 2022 combined with increases in input prices, particularly acid," Arriagada said. "However, through our Cost and Competitiveness Programme, improving operational effectiveness and innovation we will continue to control costs tightly in the short-, medium- and long-term."

"Antofagasta has reported an in-line quarter for production overall, however, the focus is likely to be on the higher than expected costs in both Q4 (albeit in line with prior guidance) and in its maiden 2022 cost guidance," BMO said in a note.

Capital expenditure in 2022 is expected to be $1.7-1.9 billion. "The final estimated capital expenditure to complete the Los Pelambres Expansion remains under review due primarily to COVID-19 impacts," Antofagasta said.