Good afternoon, and welcome to MMG's 2020 interim results briefing. I will shortly hand over to Mr. Geoffrey Gao, Chief Executive Officer of MMG, and Mr. Ross Carroll, the CFO, who will provide an overview of the interim results before taking questions. Mr. Gao and Mr. Carroll are presenting today from their homes in Melbourne, Australia, where there are currently strict COVID-19 lockdown measures in place. Please bear with us should there be any technical difficulties. I will now hand over to Mr. Geoffrey Gao.
Thank you, Blake. Good afternoon to everyone, and welcome to MMG's 2020 interim results briefing. I trust you have read through our results materials, which were released to the Hong Kong Exchange yesterday. Today, Ross and I will discuss the company's first half results and provide update on our strategy going forward. After the presentation, we will welcome your questions. As you know, MMG's number one value is safety. MMG's total recordable injury frequency rate or TRIF for first half of 2020 was 1.82 per million hours worked. Although still among the lowest of all 27 companies in the International Council on Mining and Metals, this result is slightly higher than in previous years, and something we continue to pay close attention to. The first half of 2020 has been difficult, with COVID-19 presenting unforeseen challenges for individuals and businesses across the world. MMG is no exception.
Financially, MMG's performance has suffered as a result, and Ross will discuss this in more detail shortly. However, beyond this, many members of the wider MMG community continue to live with the impacts of this pandemic on a daily basis. Nowhere has this been more apparent than in Peru. MMG has sought, where possible, to support local authorities and the communities manage the impacts of COVID-19 and limit the spread of this virus. At the operational level, we have taken steps to ensure the safety and well-being of our employees, while at the same time managing the risks presented to our operations. These measures have assisted us in keeping our sites COVID free and operating continuously throughout the pandemic. Before Ross takes you through the financial results in detail, let me briefly make a few comments on commodity markets.
Although prices for MMG's key commodities have rallied over recent weeks and economic recovery in China appears to be sustained, the uncertainty of COVID-19 remains high, and overall economic recovery is likely to be slower than first expected. In addition, concerns over short-term supply constraints are beginning to ease, and ongoing tensions between the U.S. and China may impede global growth. As such, the recent recovery, while welcome, does have a degree of uncertainty to it. With this in mind, MMG recently took the opportunity to hedge part of its exposure to both copper and zinc prices over the second half. Ross will speak to this in more detail shortly. Besides short-term uncertainties and possible weakness, MMG's long-term view remains unchanged. With respect to copper, both supply and demand factors support a positive outlook.
Demand growth will be supported over the coming decade by the increase in electric vehicles, decarbonization, and increased reliance on renewable energy demand, together with continued urbanization. This demand will be further supported by economic recovery and the support packages, many of which are being directed towards green initiatives. This combines with escalating supply challenges as new projects and expansions continue to be delayed, something that has only been exacerbated by COVID-19. Many existing projects face declining grades, sovereign risk, and pressures from environmental, social, and employee demands. Let me briefly touch on the community situation in Peru. Unfortunately, over recent weeks, the southern road corridor again experienced community unrest with road blockages in the Espinar region. This unrest was directed at other regional miners. However, it did impact Las Bambas with concentrate transport halted for over two weeks.
Also now resolved, this latest event goes to demonstrate the ongoing challenges presented by the region, not only for Las Bambas, but all operators. This is a focus for management, and we are working across many fronts to improve the situation. We have very good relationships with local, regional and national governments. The protests we face are not anti-mining, but seeking additional community benefits. As such, we are working hard to build agreements and align the interests of these communities with the long-term success of Las Bambas, by far the most significant operation in the region. With studies also underway regarding alternative logistics options, road improvement works, and regional development agreements, we believe we can progressively improve the situation. Before moving on, I would like to draw your attention to Las Bambas' recently launched digital pamphlet.
This website has been designed to provide information on Las Bambas concentrate logistics and historical and operational milestones, as well as contributions to local development, environmental management, and recent COVID-19 initiatives. I will now hand over to Ross, who will discuss the first half financial results in more detail.
Thanks, Geoffrey, and welcome everyone. As Geoffrey had mentioned or pointed out, COVID-19 has presented tremendous challenges to our business over the first half of 2020. Slide nine highlights the material impact on our financial performance, which has deteriorated compared to the prior year period. I will speak more about the specific operating factors that impacted EBITDA on the next slide. At a high level, our performance has been impacted by three key factors: lower commodity prices, which was the largest contributor to a 14% fall in revenue compared to the prior period, lower than anticipated sales volumes at Las Bambas, and lower production volumes, in particular at Las Bambas, impacting finished good movements by $165 million, which I will discuss in more detail shortly.
Although sales volumes across all sites in aggregate were higher than the 2019 comparative period, significantly higher volumes at Dugald River and Kinsevere were partially offset by concentrate transport issues at Las Bambas that arose due to the community disruptions and then COVID-19-related restrictions to the movement of our people. This has led to a sales outcome that was below what might otherwise have been expected. To give an indication of the magnitude of this, we continue to hold significant stock at Las Bambas, some 52,000 tonnes of copper metal as at 31st of Jul after the recent social disruptions at Espinar. At current spot prices, this is roughly worth $325 million of revenue or $143 million of additional EBITDA based on Las Bambas' margin for the first half of the year.
While we had originally expected to draw down concentrate stocks to business as usual levels during first half of 2020, this is now expected to extend into 2021. As a result of these factors, EBITDA for the period is down by 41%. Before discussing specific operating factors in more detail on the next slide, let me touch on two items. Depreciation decreased by approximately $45 million over the period, largely as a result of lower mining and milling volumes, particularly at Las Bambas. Interest and financing costs reduced by over $52 million compared to the prior year comparative period, partially due to lower LIBOR rates compared to the first six months of 2019 and also the benefit of a lower overall gross debt position. After taking the above into account, MMG recorded a loss after tax attributable to equity holders for first half of 2020 of $158 million.
In regards to interest rates, the base rate for the majority of MMG's floating rate debt is reset each December and June. As such, we've only in the last month started to receive the benefits of the historically low LIBOR rates that resulted from the COVID-19 pandemic. We expect materially lower interest costs during the second half of 2020, with savings on our floating rate project debt of around $36 million in the coming period when compared to the base rates that were applicable during the first half of the year. Given this opportunity, the company is taking advantage of historically low LIBOR rates by locking a portion of its floating rate debt, which I'll speak about more shortly. Moving on to slide 10, which sets out the EBITDA bridge between the first half of 2019 and first half of 2020.
Starting from the left, as mentioned earlier, revenue for first half of 2020 was 14% below the prior period. Key driver of this was price, with lower average prices across our key commodities of copper and zinc of 11% and 25% respectively compared to first half of 2019. This negative impact was over $230 million. However, lower price impacts were partially offset by higher sales volumes across all our commodities of $34.6 million on a comparative basis. Noting that in first half of 2019, Las Bambas sales were also heavily impacted by community disruption. Moving to the right, production costs were lower by more than $57 million, with all sites contributing to the savings. At Las Bambas, we had sustained prior year business improvement initiatives and realized an additional $32.5 million of savings.
This was largely associated with rescheduling maintenance costs of $21 million, together with savings on mining and processing consumables due to the impact of lower mining and milling volumes, that was $6 million. We also had lower overhead charges of $6 million. This was partially offset by higher contract spend associated with an increase in waste movement. At Kinsevere, $14.6 million of reduced processing costs were due to better quality ore feeds that resulted in lower acid consumption, together with lower contract spend as a result of lower ore volumes mined. This, however, was largely offset by an additional $10.8 million of expenses relating to COVID-19 risk mitigation activities and additional site custom duties. At Dugald River, savings of $11.9 million were achieved, mostly due to reduced energy expenditure of $6.6 million following the receipt of gas and electricity credits.
The 2019 comparative period also had the burden of additional costs associated with the flooding events that occurred in February 2019. At Rosebery, savings of $8.6 million were due to lower mining and processing consumable costs of about $2 million, together with FX savings of $4 million and lower corporate overheads of $3 million. At Las Bambas, a further improvement to EBITDA resulted from the capitalization of $83 million of deferred stripping spend, which would have otherwise been expensed. So for a change to our deferred stripping accounting policy, which occurred in the second half of 2019, shifting from a whole-of-pit approach to now to a phased approach. We have explained that in some detail last year. Moving on, we also had an unfavorable cost variance of $195 million due to stock movement. The majority of this, $165 million, is related to Las Bambas.
Stock movement at Las Bambas is showing a negative impact when compared to last year, because we had a large buildup of finished good inventory in 2019. Production exceeded sales by 45,000 tonnes in 2019. When it is put into inventory, we get a credit in operating expenses. We expected to draw that inventory down in the second half of 2019 and the first half of 2020. However, we produced 132,000 tonnes of product and only sold 134,000 tonnes in the period. Effectively, 2020 was balanced, but 2019 received a big credit because of the big inventory build. It was also a small impact because we built up 2.5 million tonnes of ore stockpiles in 2019, with only half a million tonnes in 2020. Therefore, operating costs received a bigger credit in 2019 than what we did in 2020. That all adds to the negative variance.
The other $30 million of inventory drawdowns relates to the drawdown of ore stocks at Kinsevere and a drawdown of finished goods stockpiles at Dugald River. The further net favorable operating cost movement $3.6 million, which relates to various other costs such as transportation, royalty, and other charges. There was a small increase in corporate expenses for the period of around $2 million. Redundancy and restructuring costs of $8 million offset cost-saving measures of $6 million. We remain committed to bringing these costs down. Exploration costs fell by over $5 million during the half, and partly to limited activity as a result of COVID-19, but more specifically, as a result of an ongoing focus in near mine activity. Most of this reduction related to Kinsevere.
And finally, the movement in the other category was a negative to the tune of $19 million, largely being a result of FX exposures on receivables that were denominated in Peruvian soles. Slide 11 illustrates the financial result that is specifically attributable to MMG shareholders, essentially removing the impacts of the 37.5% interest in Las Bambas held by the minority JV partners. The starting point, being a loss of $41.2 million, corresponds to MMG's 62.5% interest in Las Bambas. This outcome, as mentioned earlier, resulted from lower prices and the COVID-19 and community unrest. We then had a loss of $50.9 million attributable to our other operations, Kinsevere, Rosebery, and Dugald River, as well as exploration, corporate overheads, and other items that total $15.4 million. Finally, finance costs, excluding Las Bambas, were deducted.
This group represents interest payable in relation to the Dugald River project debt, borrowings from MMG's major shareholder, China Minmetals Corporation, which we use to fund the company's equity contribution to the Las Bambas joint venture, and interest payable on other corporate liquidity facilities. The net result of this is a loss for the period attributable to equity holders of $158 million. Slide 12 is intended to provide an indicator of MMG's EBIT sensitivity to movements in commodity prices and relevant exchange rates using the midpoint of our guidance ranges. It's provided as a guide only, and one thing I must highlight in presenting this is that it continues to use the midpoint of our initial 2020 guidance range for Las Bambas production. As you know, we have withdrawn this guidance, but there are no other numbers to use that would make sense.
What we, however, have adjusted this for is the impact of a series of commodity price swaps that the company has recently entered into, as flagged earlier by Geoffrey. Specifically, over recent weeks, we have taken advantage of a run in both the copper and zinc prices that hedge around 110,000 tonnes of payable copper and approximately 54,000 tonnes of payable zinc at around $2.91 and $1.08 per pound respectively. The hedged volumes largely relate to second half sales and open quotational pricing periods that run out to the first quarter of 2021. This does not represent a fundamental shift in the strategy of our company, and our usual intention is to maintain full exposure to floating commodity prices.
However, given MMG's high degree of leverage, the extraordinary nature of the current global environment, and the potential for recent values to be short-lived, hedging part of our exposure was seen as a prudent measure. As a result of the hedging activity, sensitivity of EBIT movements in key commodities is less than it has been in earlier versions of this table that we have presented in the past. Nonetheless, it still remains the case that copper, zinc, and the Australian dollar / U.S. dollar obviously have the biggest sensitivity to our business. With a $0.10 per pound change in the copper price leading to a $67 million full-year impact, a $0.10 change in zinc price leading to a $31 million impact, and a 10% movement in the Australian dollar leading to a $28 million impact. Now, moving on to slide 13.
Despite the challenges presented over recent months, we have continued to reduce our overall debt levels, albeit not to the degree we would have liked due to the impacts of lower commodity prices and COVID-19 on our production sales volumes at Las Bambas. At Las Bambas alone, we have $ 245 million of inventory sitting at site at current prices. As I mentioned earlier, however, record low interest rates mean that we expect to see significant interest savings into the near future. Taking advantage of this and to provide a degree of added certainty regarding future interest payments, in June, the company entered into an interest rate swap, which will speak to floating rate Las Bambas project debt. This swap has a notional value of $2.1 billion, will amortize over the next five years in line with MMG's project debt to maintain a hedge proportion of roughly 50%.
The rate that we hedged was 0.43%, excluding credit margins, well down from the nearly 2% we saw at the start of the year. While we're on this slide, I'll also give a quick update on CapEx. Several large projects, in particular at Las Bambas, were scheduled for 2020. As a result of current circumstances, we have either actively sought to defer some projects or progress has been delayed due to the impacts of COVID-19 in Peru. As a result, we anticipate the capital expenditure for 2020 will now be between $100 million and $150 million below our original expectations. I would note, however, that very little of the planned 2020 CapEx was discretionary. As such, we would expect savings to be temporary only and will fall into our 2021 CapEx spend. Slide 14 highlights our debt maturity profile.
First point I would like to highlight on this slide relates to the $2.2 billion shareholder debt, which has a $700 million tranche falling due in July 2021, as represented by the light blue bar. As you know, MMG is fortunate to have the support of our major shareholder. With formal confirmation having been given, the debt falling due in 2021 will be deferred beyond the end of that year. We will work with our majority shareholder to formalize this arrangement over coming months. At our 2019 annual results presentation, the full implications of COVID-19 were only just becoming apparent. However, at the time, I mentioned that the ongoing support of our lending partners and that we were confident in our liquidity position.
This support has been demonstrated over recent months, and I'm pleased to confirm that over the next couple of weeks, we will be entering into an $85 million liquidity facility for the MMG group, excluding Las Bambas, together with an additional $800 million standby liquidity facility for Las Bambas. These facilities are in addition to the existing liquidity reserves, with both having been fully credit approved and the documentation agreed with the lenders. The recent rally in commodity prices mean that these facilities are unlikely to be used in the near term. However, they provide a low-cost source of additional liquidity should it be required, and we consider them to be a prudent risk management step in these unprecedented and uncertain times. Slide 15 gives a quick overview of Las Bambas and there's further details in the appendices to this presentation and in the quarterly production reports.
But let me now quickly run through a few of the key points in relation to our four operating sites. As mentioned already, Las Bambas has faced challenges over the first half of the year from community disruptions, conveyor belt maintenance requirements, and most significantly, COVID-19. The major risk of getting back to full production is the shortage of people. You are probably aware that Peru has a very high number of COVID cases, so getting sufficient employees and contractors to site is a real challenge for us. We remain focused on ensuring a resumption to normal activity as soon as circumstances allow, and further developing this highly prospective site. We remain optimistic regarding recent drilling results. We are expected to result in expansion of the Chalcobamba pit design, with 2020 still being targeted for permitting of this location.
As mentioned earlier, concentrate transport routes are currently operating, and we intend to continue drawing down existing concentrate stockpiles at site. This, together with improved production and recovery in commodity prices, can be expected to result in an improved performance over the second half of the year. Kinsevere continues to benefit from the shift to mining at the Central pit, which has resulted in reduced costs and increased production. Despite lower commodity prices, Kinsevere increased its first half EBITDA by 56% compared to the first half of 2019 and reduced C1 costs by 25%. As you will be aware, Kinsevere's oxide ore reserves are nearing the end of its life. The company continues to pursue a feasibility study that will potentially see the addition of a sulfide and cobalt circuit to the plant, which will result in the extension of Kinsevere's mine life.
We expect to reach a decision on this over the coming months. At Dugald River, the mill has continued to perform well over the first half of the year. We will continue to deliver on optimization work both in the plant and the mine, with a focus on opening up new underground operating areas. Pleasingly, July 2020 was a record production month for us. Increased sales over the first half assisted in offsetting the impact of lower commodity prices. However, the mine continues to face difficulties with ore grades. Progressive and sustained improvements in recovery and processing circuit performance will offset this impact over future periods. Lower production costs and higher volumes over the first half have enabled a reduced C1 cost level of $0.76 per pound for the first half. This is after taking into account $0.08 a pound of impact from increased treatment charges.
It is a long-life zinc mine of significant scale. MMG will continue to capitalize on the strong zinc market fundamentals over coming years with this asset. Finally, moving on to Rosebery, where mine output has continued to be impacted by the lag effects of the seismic events in 2019. The focus on increasing mine flexibility will assist to mitigate the impacts of future seismic events and other operational challenges that come with mining at increasing depths. As with all other sites, lower zinc and copper prices impacted on Rosebery's financial performance in the first half, together with lower volumes. These were, however, broadly in line with expectations as ore grades declined in deep areas of the mine. C1 costs for the half benefited from higher precious metal by-product credits coming at $0.10 a pound, making Rosebery a highly cash-generative operation.
The precious metal by-product credits somewhat offset the lower copper and zinc prices. Over the rest of the year, we will continue to evaluate life extension options for Rosebery to extract the most value for the business. Before I hand back to Geoffrey, let me just summarize a few of the key points that I've covered on slide 19. As you will see from the chart, we have seen some extreme volatility in copper and zinc prices over the first half of the year. We were facing extremely difficult trading conditions in February and March due to the rapid drop in prices and the physical difficulties associated with COVID-19 and the community disruption. The company acted quickly and decisively to protect its position. Over the coming days and weeks, we'll be finalizing $885 million of additional standby liquidity facilities for the group.
We've implemented a short-term commodity hedging program, hedging copper at $0.80 a pound above the March lows and zinc at $0.25 a pound above the March lows. We fixed a portion of our floating rate debts to provide certainty and to take advantage of record low LIBOR rates. We have maintained cost discipline, reducing cash costs across all our sites, and reducing capital to preserve liquidity. All sites' cash production costs are running below our internal budgets. MMG, like all companies, has faced a significant number of challenges over the first half of the year. We have responded to these proactively and positioned the company to weather any ongoing uncertainty and volatility that may lie ahead. I will now hand you back to Geoffrey to wrap up the presentation.
Thank you, Ross. In late 2019, MMG began a whole business transformation agenda. In hindsight, this was the right timing as it has sustained significant improvement momentum during the challenges of COVID-19. The key elements of this process include taking great advantage of the unique competitive advantage we have from our links with China, including the ongoing support that we receive from our Chinese stakeholders. To this end, we have recently taken steps to establish a Beijing office, further strengthening our gateway into China and truly leveraging opportunities to engage with key stakeholders and supporters. We have also continued to pursue a mixed leadership model that maintains a mix of local and international leaders across our operations and in technical and specialized functions.
We also continue to take steps to build the competitiveness of our operating sites by maximizing production while driving down costs and devolving clear responsibility for performance to operational management while maintaining a leaner group office with reduced overheads. Over the last three years, our head office in Melbourne has reduced by approximately 60%. Finally, we continue to work with the broader MMG community to achieve targeted progress that aligns the interests of and ensures returns for all MMG stakeholders. We are essentially changing the way we work at MMG, building a lean management structure closer to our China advantages while driving our assets to operate for value. Reforms in support of these drivers continue to be pursued. They will leave MMG in a stronger position to operate in the post-COVID environment and take advantage of growth opportunities over the next decade to maximize value generation for our shareholders.
In closing, let me reaffirm that my management team and I remain committed to safely guiding MMG, its employees, and the members of our host communities through this volatile period. Our teams at head office and sites have shown remarkable resilience and commitment to delivering on our objectives. Although we have withdrawn our Las Bambas related guidance for 2020, MMG continues to stand by its cost and production guidance for all other operating sites. At Kinsevere, we expect to produce between 68,000 and 75,000 tonnes of copper cathode at an average cash cost of $1.80 to $1.95 per pound. At Dugald River and Rosebery, we expect to produce between 225,000 and 245,000 tonnes of zinc at an average cash cost of $0.60 per pound. At current commodity prices, we expect to generate strong operating cash flow from these sites over the second half.
However, I emphasize the high level of uncertainty surrounding potential further impacts from COVID-19. While we are not yet in a position to provide revised Las Bambas guidance, we continue to progress our revised mine planning scenarios and respond to local situations. Activity levels at site continue to increase, and we will provide revised guidance as soon as we have greater operational certainty. Leveraging the whole-of-business transformation agenda that I just mentioned, MMG is developing a lean, efficient operating structure that will enable us to operate competitively into the future and capitalize on suitable growth opportunities as and when they arise. In the meantime, we continue to progress our consideration of the next development phase at Kinsevere, Chalcobamba development at Las Bambas, and the ongoing optimization and extension of life of our Australian assets.
Thank you for your time today and your support over what has been a challenging time for all of us. I will now hand back to the moderator who will open the line to questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Jack Shang from Citigroup. Please go ahead.
Hi, Geoffrey. Thanks, Ross, for your presentation. I have three follow-up questions. The first one regarding our Las Bambas production plan, the second regarding Kinsevere operation, especially related to transportation in D.R.C., and the last one regarding the hedging parts. The first one is from our last call in July, I recall that the company and the management team had guided or talked about that hopefully we can get back to full operation in the second half. Now it seems that the workforce may be a challenge. My question is, what is the current run rate of the mine? What is the current utilization at the mine site and also at the mill, at the processing plant overall at Las Bambas? The follow-up question on this is, you mentioned that you will provide guidance only when there's more operational certainty.
That uncertainty of operation, is that specifically related to workforce, or it's also related to the on and off community roadblock issues? Can you elaborate a little bit on that? These two are regarding the Las Bambas. A follow-up on also on Las Bambas, sorry about that, is the inventory. What is the current copper inventory in concentrate at Las Bambas site? Last time, I think by the end of first half, we had 45,000 tonnes. What's the current level? If you could elaborate a little bit more. The second on Kinsevere. Kinsevere, what is the current transportation situation out of D.R.C.? We heard there have been some port disruptions. Do you foresee any potential disruptions for Kinsevere on the transportation side? Lastly, on hedging. I understand that we hedged some of the copper exposure.
Are we going to hedge more, going forward in the rest of year, or is that it? Also, if copper price goes above $2.9 per pound, on a net-net basis, do we need to record additional hedging losses on your P&L on a net-net basis? Yeah, that's all my questions. Thank you.
Thank you, Jack. I think I can take the questions on Las Bambas, Kinsevere, and then I will ask Ross to answer the questions on hedging. Your question regarding the operational rate in the Las Bambas. Currently, we are still facing the challenge to get enough workforce on site due to the accommodation challenges. Because of the health protective measure we implemented, then we cannot accommodate enough number of workforce or employees on site. We are working to increase the number of beds on site, try to accommodate more employee. But that will take time. Currently, we can only have about 75% of workforce on site compared to the normal case. But with that workforce, we try to maintain the operation close to 100%. I mean, the mining and milling and processing. But the main impact is on the development-related activities. That's the current situation.
Going forward, the biggest uncertainty is still related to COVID-19. The COVID-19 situation in Peru is still a real threat. When we did the antibody test for our workforce recently, we have seen increased positive test result ratio among our employee and particularly among our contractors. So, when you say what kind of certainty we need to give the revised guidance, that is more on the COVID-19 related situation. We have to have the confidence that we can have the reliable number of workers available, and also we have the accommodation facility in place at site. So that is the question related to your Las Bambas operation. I think you also asked about the inventory level.
Last time when we made the second quarter production report, at that time, I mentioned by the end of June, the stock level is 38,000 tonnes of metal in the concentrate. After that, we experienced the road blockage we mentioned earlier. That happened in the second half of July. So I can give a number. By the end of July, we got increased number of inventory on site in Las Bambas, that is the 52,000 tonnes metal. So, as Ross mentioned, we expect we can draw down these inventories by sometime next year. That's the Las Bambas-related questions. In Kinsevere, a question around our transportation. Because in Kinsevere, we have an offtake contract with our customer, and in fact, we deliver our copper cathode in the warehouse on site. So the transportation on the port situation, in fact, is out of our responsibility.
I should say, the situation you mentioned will not have an impact on Kinsevere, particularly regarding our sales terms to our customers. I now hand over to Ross to answer question about hedging.
Yes. Thank you, Geoffrey. Thanks for the question, Jack. Jack, in regard to the hedging, we're not planning on doing any more. So we've basically hedged 75% of our equity copper from Las Bambas and from Kinsevere, and sort of just under 50% of our remaining zinc exposure for the year. So yeah, as I said, we're not planning on doing any more. Now, if there was a, say, a 10% increase in the copper price, instead of $2.91 at average $3.01 the remainder of the period, we'd be looking at probably a $24 million loss on copper. Same if it went down by $0.10 would be a $24 million gain. A 10% movement in zinc price up to from $1.08 to $1.18 would mean about a $12 million loss if it was to go up to that amount.
But obviously if it went down by the same amount, it would be about a $12 million gain. And that will be reflected in the current period.
Hey, Ross, just a follow-up on that. If assuming copper price goes higher by 10%, you would record, I understand, say a hedging loss on your P&L. But shouldn't you be able to basically sell your physical copper concentrate at a higher copper price so that these losses are actually offset with your actually physical copper pricings in real operation? So on net net, does it mean that you are effectively hedged at $2.9 in the rest of the year?
Yeah. No, I think that's right, Jack. Obviously, if it goes up by $0.10 , we would get the extra $0.10 through the revenue line on 100% of our equity.
Yes.
Copper, and we would obviously have the hedging loss on 75% of it. So we would still be getting 25% of the benefit.
Okay. Perfect. Thank you.
Yeah.
Yeah. Thanks.
Thanks.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We will pause as we wait for people to join the queue. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question is a follow-up question from Jack Shang from Citigroup. Please go ahead.
Hey, thanks. Thanks for taking additional question from me. It is just relatively a long-term and a strategic one. I understand the company has been acquiring assets or at least constantly looking for expansion opportunities or options. So at this moment, given that you have a stretched balance sheet, you got Las Bambas, what are the key areas you are most interested in looking forward, say, in the next two to three years, in terms of potential growth options going forward?
Okay, I'll take that. Thank you, Jack. Our long-term growth strategy has never been changed. We aim to become a world-class player in the mining business, particularly in our core commodities. In the history, MMG achieved the rapid growth through external M&A activities. You are quite right about our short-term challenge of high gearing or some operating challenges. So in my transformation slide, I mentioned that is probably our near-term focus. That is to focus on the internal operating efficiency, organic growth opportunities, along with the Las Bambas, Kinsevere, and Australian assets. We will be continuously looking for external opportunities. But today, we will only take action while we believe that is the real value accretive opportunity. As I talked earlier on, talked several times before that we will not just grow for the growth's sake.
We will be very disciplined and also actively looking for external opportunities. I hope I answered your question.
Yes, thank you, Geoffrey.
Thank you. Your next question comes from Chris Xu from Horizon Assets. Please go ahead.
Hi, Geoffrey and Ross. Thank you very much for your presentation and Q&A. My question is, could you give us some updates on the potential refinancing of the debt on your balance sheet? What are the plans and also, what sort of interest rates or cost savings, I mean, can we expect from such initiatives, if any? Thank you.
Yeah. Thanks for the question, Chris. At the moment, there's probably no real sort of plans to refinance the debt. What we have seen during the year is, at the start of the year, I think the LIBOR rate was 1.9% or 2%, and that has dropped down to, I think it's sort of in the 0.3% or 0.2% at the moment, depending on the day. So we have realized a significant saving there on an annualized basis. That'll add sort of about $60 million of interest savings to us. And that money then becomes pretty cheap. The other thing is being realistic about it, that obviously with the COVID-19 situation and the drop in prices and following on by, and with the community disruption as well, our financial position wasn't really great in the first part of the half year.
It is a little bit hard when you're in that situation to sort of roll into a bank and say, we want a margin cut of 50% or something like that. So, at the moment, it's just a matter of soldiering through and trying to pay down the debt as quickly as we can.
Got it. Thank you very much. And also, could you give us some sort of guidance for the CapEx for the next couple of years, if you can? Well, almost just direction or just a rough idea would do.
As I said in the presentation, we will probably be $100 million-$150 million lower this year than what we expected. That is really as a result, we just cannot get enough people on-site. Obviously, where we have got people on-site at Las Bambas, I am referring to, the main focus there is obviously operators, so we can keep production going. We would have probably said next year would have been roughly $500 million, including deferred stripping, but that $100 million-$150 million may even end up being a bit higher, will now probably move into next year. At the moment, it is hard to tell what COVID restrictions we would have starting next year as well. So it is a little bit hard to predict.
But roughly from what we know now, you would probably say it is $500 million plus another $100 million of catch-up spend, so another $100 million of catch-up spend.
Got it. Thank you very much.
Thank you. There are no further questions at this time. I will now hand back to Geoffrey for closing remarks.
Okay. Thank you all for joining us today. If you have any follow-up questions after this meeting, you can contact our investor relations or corporate affairs team. Goodbye, everyone.