Annual Report 2007 - Antofagasta plc

Notes to the Financial Statements continued24 Financial Instruments and Financial Risk Management continuedd) Embedded derivatives – provisionally priced sales continued(i)Copper salesLosLosPelambres El Tesoro Michilla Pelambres El Tesoro MichillaCopper Copper Copper Copper Copper Copperconcentrate cathodes cathodes concentrate cathodes cathodes2007 2007 2007 2006 2006 2006US$m US$m US$m US$m US$m US$mProvisionally invoiced gross sales 2,041.8 678.8 332.2 2,175.5 653.1 326.0Effects of pricing adjustmentsto previous year invoicesReversal of mark-to-market adjustmentsat the end of the previous year 110.1 (1.3) 0.6 (33.2) (0.2) 0.1Settlement of copper sales invoicedin the previous year (88.1) (6.5) (3.3) 169.2 2.0 0.6Total effect of adjustments to previousyear invoices in the current year 22.0 (7.8) (2.7) 136.0 1.8 0.7Effects of pricing adjustments tocurrent year invoicesSettlement of copper sales invoicedin the current year 103.6 3.7 1.4 197.6 8.6 8.8Mark-to-market adjustments atthe end of the current year (72.8) (1.0) 0.1 (110.1) 1.3 (0.6)Total effects of adjustments tocurrent year invoices 30.8 2.7 1.5 87.5 9.9 8.2Realised gains/(losses) oncommodity derivatives – 0.2 (14.2) – – –Turnover before deducting tolling charges 2,094.6 673.9 316.8 2,399.0 664.8 334.9Tolling charges (169.4) – – (254.0) – –Turnover net of tolling charges 1,925.2 673.9 316.8 2,145.0 664.8 334.9i) Copper concentrateCopper concentrate sales at Los Pelambres have an average settlement period of approximately four monthsfrom shipment date. At 31 December 2007, sales totalling 99,400 tonnes remained open as to price, with anaverage mark-to-market price of 302.4 cents per pound compared with an average provisional invoice price of335.7 cents per pound. At 31 December 2006, copper concentrate sales totalling 127,100 tonnes remainedopen as to price, with an average mark-to-market price of 287.0 cents per pound compared with an averageprovisional invoice price of 326.3 cents per pound.FINANCIAL STATEMENTSTolling charges include a mark-to-market loss for copper concentrate sales open as to price at 31 December2007 of US$5.1 million (31 December 2006 – mark-to-market gain of US$7.6 million).ii) Copper cathodesCopper cathode sales at El Tesoro and Michilla have an average settlement period of approximately one monthfrom shipment date. At 31 December 2007, sales totalling 11,000 tonnes remained open as to price, with anaverage mark-to-market price of 301.7 cents per pound compared with an average provisional invoice price of305.4 cents per pound. At 31 December 2006, sales totalling 11,600 tonnes remained open as to price with anaverage mark-to-market price of 286.6 cents per pound compared with an average provisional invoice price of294.0 cents per pound.120Antofagasta plc Annual Report and Financial Statements 2007