Welcome. I am Iván Arriagada, Chief Executive of Antofagasta. With me today, you will also hear from our Chief Financial Officer, Mauricio Ortiz, and René Aguilar, our Vice President of Corporate Affairs and Sustainability. We will take you through our 2022 half-year financial results. I would like to start with a brief overview of our performance and challenges during the first half of the year. I will talk about developments on the current political and fiscal events in Chile and the copper market. Mauricio will then take you through our financial results, and René will talk about safety and our sustainability achievements and challenges, with a focus on communities and climate change. I will then talk about our development options. Finally, I will close with reminding everyone about Antofagasta's investment case and setting out our key priorities.
Although we have experienced significant challenges over the first half of the year, with the copper price weakening as a result of macro developments, the continued drought in Chile and the incident with our concentrate pipeline at Los Pelambres, with the actions that we have taken, coupled with the quality of our assets and the continued strength of our balance sheets, we have been able to weather these challenges. Sales volume during the period were lower and input prices higher. Although we experienced increased general inflation, the impact was largely offset by the weaker Chilean peso. Operationally, our processing plants have been working well, with Centinela and Antucoya both operating above design capacity. Los Pelambres has also been working efficiently despite its reduced throughput.
Looking forward, as the availability of water improves and grades increase at Centinela Concentrates, we expect a significantly stronger production performance in the second half of the year. However, whatever the high or lows, we remain committed to safety, which is our top priority. During these first six months of 2022, our safety performance improved at both the mining and the transport divisions, with a decrease in the number of high potential incidents and the Lost Time Injury Frequency Rate. Mainly because of our lower production and lower realized copper prices, our EBITDA decreased to $1.2 billion, and our EBITDA margin fell to a still respectable 49%, with our balance sheet remaining strong. We have declared an interim dividend of $0.092 per share, which is in line with our normal payout ratio for interims of 35% of net earnings.
We are committed to mitigating and adapting to climate change, and the copper we produce is part of the solution to this global challenge. From April this year, all our mining operations have been operating solely using renewable energy, significantly reducing our Scope two emissions. Regarding water, with a desalination plant being built at Los Pelambres and its further expansion, we expect that by 2025, 90% of the water used by our mining operations will be sea or recirculated water. We continue to work closely with the communities where we operate through the relationships we have developed over the years, in particular, ensuring they have access to potable water. With our suppliers, we are working with them to ensure alignment with our leading standards on environmental, social, and governance matters.
Looking to the future, we are creating value through our growth projects and innovation, a key part of our strategy as it leads to improved performance and growth. We're on track with our current growth projects, and we are providing an update today on the next project in our pipeline, the Centinela Second Concentrator. We have developed a patented primary sulfide leach technology called Cuprochlor-T that gives us additional growth potential. We also recently declared the mineral resources for two new greenfield deposits in the north of Chile, Cachorro and Encierro. All of this is underpinned by our purpose of developing mining for a better future. As previously announced, following the pipeline incident at Los Pelambres and the continued uncertainty about water availability, full year copper production is now expected to be in the range of between 640,000 and 660,000 tons.
Looking to the second half of the year, we expect production to increase significantly quarter-over-quarter as throughput recovers at Los Pelambres with increased water availability, grades improved at Centinela Concentrates, and as the copper in concentrate stockpiled at Los Pelambres concentrate plant is moved to the port. Completion of the desalination plant is expected in quarter four, 2022, and with this milestone achieved, the group's exposure to water scarcity risks will be substantially reduced. In terms of cost, the impact of the lower production and the high current levels of inflation are partially offset by the weakening of the Chilean peso, and we now estimate full year net cash cost at $1.65 per pound. Lastly, group capital expenditure guidance for the year is unchanged at $1.9 billion.
In Chile, there are various changes underway, including, most importantly, the development of a new constitution. In early July, the constitutional convention completed the draft of the new proposed constitution. A national referendum to accept or reject the new constitution will be held on the fourth of September. In addition, last month, the government presented a tax reform bill to Congress and a new proposal for the mining royalty. The initial view is that this proposal is more onerous than the proposal made by the Senate Mining and Energy Committee in January this year, but less onerous than the original proposal made by the Lower House in May 2021. The new draft is now being reviewed by the Senate before being passed to the Lower House for its consideration.
The mining industry is engaging with the government and providing its perspectives, and we expect that the royalty bill will be finalized by the end of the year. Chile still has the opportunity to grow and provide critical metals, benefiting not just itself, but also the world in achieving its decarbonization targets. The copper price dropped sharply in June, and although it has recovered slightly since then, it is still trading at levels significantly lower than those we have seen over the last eighteen months. Currently, it is being buffeted by concerns about global recession and the rate of recovery of the Chinese economy. Copper price movements in the short term have diverged from the physical fundamentals, influenced by trading in financial markets, despite supply being weak this year and stockpiles at historically very low levels.
Looking forward, the speed of recovery will depend on countries' abilities to overcome the current inflationary pressures, manage their economies, and for international trade to recover. In the longer term, the fundamentals remain very strong. I would now like to pass over to Mauricio, who will give you some more detail on our financial performance during the first half of the year. Mauricio?
Thank you, Iván. Before we review the first half results in detail, I would like to emphasize three main concepts. First, Antofagasta's operational resilience. As Iván mentioned, we have been able to weather the challenges of the first half, and we expect the remainder of the year to be much stronger than the first half in terms of production and cost. Second, our reliable returns to shareholders. Consistent with our committed dividend policy and our track record, we have declared an interim dividend equals to 35% of net earnings. Finally, our financial discipline. We continue to have a strong balance sheet with a net debt to EBITDA ratio at the end of the period of 0.13x . Now, moving to the details.
Our cost and financial results in the first half are consistent with the production levels we anticipated, where lower throughput at Los Pelambres and lower grades at Centinela temporarily impacted our performance, with production falling by 26% and net cash costs increasing by 60%. These factors, along with a lower realized copper price following the sharp decline in price in June, explains why revenue for the first half was $2.5 billion or 30% lower than in the same period in last year. This decline and an increase in operating cost, mainly due to higher input prices, resulted in a lower EBITDA of $1.2 billion, with a still healthy EBITDA margin of 49%. Cost control is always a priority, and even more so in this inflationary environment with high input prices.
This has reinforced our commitment to our Cost and Competitiveness Programme, which delivered savings of $35 million in the first half. Finally, when we look at net earnings, our result for the first half was $0.264 per share, and our declared interim dividend is $0.092 per share, equivalent to a payout ratio of 35%, in line with our dividend policy and historical interim dividend payout ratio. Now, just to recap briefly on the performance of our operations. In the first half of 2022, Los Pelambres production decreased by 42% compared with the same period last year. This decrease includes the impact of the concentrate pipeline incident, but was mainly driven by the plant reduction in throughput due to water shortage arising from the continuing drought.
Los Pelambres net cash costs consequently were 59% higher at $1.32 per pound. In line with expectations at Centinela, production was lower than in the first half of 2021, mainly due to a significant 25% ore grade decrease at Centinela Concentrates. This was partially offset by increased throughput with the concentrator averaging above design capacity. At Antucoya, we produced over 36,000 tons of copper on the back of an almost 4% throughput increase at the plant. Which also performed at above design capacity. However, this was offset by lower copper grades in comparison to the first half of 2021. At Zaldívar, copper production was 9% higher compared with the same period last year due to higher copper grades and recoveries. Following completion of the chloride leach project, recoveries are increasing as the project comes online.
Finally, the transport division continues to increase volume as the recent new contracts completes their ramp-ups. To sum up, our copper production decreased due to the expected temporary reduction in throughput at Los Pelambres as a result of the drought and the lower grades at Centinela Concentrates, in both cases with associated lower by-products production. The concentrate pipeline incident further impacted production in the first half, but 12,000 tons of copper in concentrates were stockpiled at Los Pelambres concentrator and will be sold in the second half. This temporary decrease in production accounts for $0.52 per pound or near 80% of the net cash cost increase of $0.68 per pound, with the balance explained mainly by higher input prices, particularly for diesel and sulfuric acid, with the latter affecting mainly our cathode production.
However, this was partially mitigated by the weaker Chilean peso and cost benefits from our Cost and Competitiveness Program, which achieved structural savings and productivity improvements equivalent to $0.06 per pound during the first half. Overall, our net cash costs for the half year were $1.82 per pound compared to $1.14 per pound in the same period last year. In the second half of the year, both the throughput and the grade reductions are expected to reverse. As I mentioned earlier, our EBITDA was $1.2 billion, some $1.1 billion lower than in the first half of 2021. This was mainly driven by 30% revenue decrease due to a lower sales volume and lower realized copper price.
Some 13% of the sales volume decrease is the copper in concentrates stockpiled at Los Pelambres concentrator plant, which will be sold in the second half of the year. Mining costs increased, while at the same time the contribution from our associates and joint ventures also increased, mainly at Zaldívar. Finally, our EBITDA margin was a healthy 49%. Consistent with our financial discipline, our balance sheet remains strong. This has been important in preserving our financial resilience, especially in times of uncertainty. This position supported the group in successfully issuing its second bond, a 10-year, $500 million note, which further diversifies our funding sources and extends our maturity profile.
The net debt to EBITDA ratio at the end of the period was 0.13x , mainly reflecting the $1.3 billion payment of dividends, the bulk of which was the final dividend paid to the company's shareholders. I would like to close this financial review by emphasizing once again how fundamental our capital allocation model is in making all our financial decisions. Everything is underpinned by our strong operating cash flow. After this, we invest through the cycle in sustaining capital programs that will replace plant and equipment. We also invest in mine development, where we open up different phases of the mines to expose the mineral to be mined later. Next, we fulfill our minimum commitment to our shareholders by paying 35% of our underlying net earnings as dividend.
With our excess cash flow, we consider the strength of our balance sheet and then assess our growth projects, which must be in line with our stringent return and risk criteria. If nothing fits our criteria, we'll return this excess cash to our shareholders in accordance with our dividend policy. At Antofagasta, we have put value optimization and climate resilience at the center of our financial decisions. From the beginning of the year, we have been using an internal carbon price, and it's really, really exciting how we are assessing our investment and procurement decisions while we decarbonize our processes. This will definitely help us to be better prepared for the challenges we face in the future and to create sustainable value and shareholder return over the long term.
Now, René will give you some more detail on our sustainability performance. René?
Thank you, Mauricio. As was mentioned earlier, during the first six months of the year, we have seen a significant improvement in our safety performance, with high potential incidents 21% less than the same period last year, and our LTI frequency rate down by 23%. In terms of safety, our current focus is to reinforce the key principles of our strategy, focusing on our operators' ability to understand and manage the risks of our critical tasks, ensure competent and effective supervision, and having a decisive leadership effort to reinforce our commitment to zero fatalities and occupational illnesses. We focus on high-risk tasks and employee participation in the identification and implementation of critical controls. We are also focused on improving our learning cycle through the identification of the root causes of events and anticipating their potential occurrence in other areas.
Our business goals and success are intricately linked to those of our surrounding communities. The pressure drop arising from the leak in Los Pelambres concentrate pipeline automatically triggered an emergency shutdown, which significantly limited the volume of the outflow. Following the incident, engagement with several rural communities ensued with the participation of local and regional authorities. Agreements reached include initiatives focused on participatory monitoring and enhanced information sharing about parts of the company's infrastructure and financing social projects. In line with the group community's relations model, most of these projects will be in partnership with the public sector. Over recent years, Los Pelambres has strengthened its water strategy to contribute to the mitigation of community's challenges arising from water scarcity. Projects have been developed to provide assistance during emergencies and improve the quantity and quality of water available to local communities.
We've also developed a local procurement program with more than 150 small businesses from the Choapa province. In addition, we have continued with our EnRed program, which means connected network, installing 256 kilometers of fiber-optic cables, providing internet to some of the more rural areas. In the north of Chile, we have been working with indigenous communities to identify and develop social projects. During the first half of the year, we updated our human rights policy, which includes the recognition and respect of the rights, culture, and traditions of all indigenous peoples. We are committed to mitigating and adapting to climate change. From April this year, all our mining operations have been using 100% renewable energy, significantly reducing our Scope two emission.
This has allowed us to make real progress in reducing our carbon emissions to achieve our short-term emissions target of reducing our Scope one and two emissions by 30% by 2025, and our longer-term target of achieving carbon neutrality by 2050. At the same time, we are working to reduce and ultimately eliminate the use of diesel at our mining operations using alternative power sources and a portfolio of energy efficiency initiatives. We have two initiatives under development to replace fossil fuels. Our first is a hydrogen project at Centinela, and the second is a project to test the use of battery-powered haul trucks at Antucoya. We are also looking at installing trolley assist at Los Pelambres.
As for Scope three, having completed an initial review of our 2020 figures, we continue to analyze and measure our emissions, working towards setting a reduction target in 2023. Regarding water, once the desalination plant at Los Pelambres and its subsequent expansion are complete in 2025, we expect 90% of the water we use to be either from the sea or recirculated. Thank you for your attention. I will now pass you back over to Iván.
Thank you, René. Not only are we a reliable and responsible producer, but we have embedded organic growth that will allow us to produce sustainably into the future. We have a variety of exploration and late-stage projects which are in different phases of evaluation and will generate organic growth for the company. These include the new and attractive recent discoveries, which we call Cachorro and Encierro, which together add nearly 700 million tons of high-grade mineral resources to our inventory. We have a huge mineral resource base of over 19 billion tons, of which some 7 billion tons are in the Centinela mining district and 6 billion are at Los Pelambres. This gives us options to develop our inventory at a time when copper supply is becoming increasingly constrained.
We believe we have a very strong organic growth potential that will allow us to increase our copper production to up to 900,000 tons a year by 2026. Beyond this, we have completed a large-scale pilot program to validate our in-house patented primary sulfide leaching technology, Cuprochlor-T. This new technology will potentially unlock value from previously uneconomic mineral resources and bring forward the profitable processing of ore otherwise scheduled to be mined in many years' time, or that was previously considered to be uneconomic. The Los Pelambres expansion project will increase production and secure the operation's water sources. The Zaldívar Chloride Leach project is increasing copper production through improved recoveries.
At Centinela, the Esperanza Sur pit will bring greater flexibility to the operation and will allow it to smooth and optimize its year-on-year production profile. At our Centinela Second Concentrator project, we have recently completed detailed engineering and execution plans, and I will give you an update on this shortly. Innovation is critical to Antofagasta's strategy of creating long-term value. We have several exciting projects. We have completed a remote operation center in the city of Antofagasta for Centinela and are building another in Santiago for Los Pelambres. Our first fleet of autonomous trucks is now operating in the Esperanza Sur pit at Centinela. Just this month, we have started sending the ore from the pit to the concentrator for processing. Last year, we completed industrial scale tests to demonstrate our proprietary Cuprochlor-T primary sulfide leach technology.
This confirmed smaller scale tests we have carried out over recent years, and the technology is now ready to be rolled out to our operations. We will continue to introduce technology at our operations to improve productivity and costs, and this will help us combat the relentless challenges presented by declining grades. Our three current growth projects shown on this slide at Los Pelambres, Centinela, and Zaldívar will add up to 80,000-90,000 tons of copper each year once they are completed. As previously announced, at the end of half one, the Los Pelambres expansion project was 82% complete. The desalination plant is expected to be completed in quarter four 2022, and the concentrator plant expansion in early 2023. At Zaldívar, construction of the chloride leach project was completed on budget in January 2022 and is now being commissioned.
At Centinela, the Esperanza Sur pit is now in operation, supplying ore to the concentrator plant. The next project in our pipeline is a second concentrator at Centinela. We have updated our evaluation of the project, which will go to the board early next year. The updated capital cost of the project is $3.7 billion. The increase reflects inflation, design improvements, heightened environmental and other regulatory requirements, and the results of advanced engineering and a detailed execution plan. The capacity of the new concentrator will be 95,000 tons of ore per day, producing on average approximately 170,000 tons of copper equivalent a year over the first 10 years of operation. This will move Centinela to be a producer in the first quartile of the industry cost curve.
We're also investigating the sale of the existing water supply system to a third party who would also build a new water system. This will significantly change the funding requirements of the project, down from the $3.7 billion updated CapEx estimate. This evaluation will be completed by the end of the year, and the sale will only go ahead if it's value accretive. As I mentioned earlier, we are very excited that we have discovered two significant greenfield deposits in the north of Chile. We announced late last year the discovery of Cachorro in the Antofagasta Region, near to Centinela and Antucoya, and we announced the discovery of Encierro, which is further south in the Atacama Region, in June.
Encierro has an inferred resource of 522 million tons, with a copper equivalent grade of 0.79%, and this represents just part of the potential resource. Now, let me summarize why Antofagasta is a solid investment case across the cycle. Copper is a critical metal to support the global transition to a low-carbon economy. Antofagasta is a pure play copper producer with high-quality assets in Chile, supported by a team that delivers reliably and responsibly. We have many embedded growth options in our portfolio. We've identified levers to unlock that growth that will create value for all our stakeholders and which can take us close to 900,000 tons per year of copper production by 2026. Our high-quality assets, Los Pelambres and Centinela, hold 70% of our mineral resources and are the source of over 80% of our production.
They are both expandable and offer us a significant range of value-accretive organic growth options. In addition, we have incremental growth within our asset portfolio, including our new proprietary primary sulfide leach technology that could unlock value from previously uneconomic mineral resources. We also constantly work to improve our operating efficiency in the short, medium term, and long term through cost control and productivity improvements while maintaining the reliability and stability of our operations. Across our business, sustainability underpins everything we do. This includes the safety and health of our people, our commitment to reducing our impact on the environment, and sharing development benefits with the local communities. We have the financial strength to deliver this growth responsibly, as is illustrated by the robustness of our balance sheet.
We remain committed to being financially disciplined and providing returns to shareholders through the application of our capital allocation policy, which is fundamental to all our investment decisions. Let me finish by looking ahead to the rest of this year. Safety is always our top priority. We're committed to having zero fatalities, and we will continue with our relentless focus on protecting the health of our workers and communities. We continue to embed our climate change and sustainability strategy in all our decision-making. On the critical resource of water, we will continue to take all necessary actions to mitigate the impact of the drought on neighboring communities and our operations. Most significantly, we will complete our desalination plant at Los Pelambres in the fourth quarter.
This period of higher input prices and general inflation and the recent significant decline in the copper price has reinforced our commitment to control costs. We're committed to maintaining our financial discipline with a focus on value creation and shareholder returns. We are in a prime position to seize the growth in copper demand. We have the embedded tons across our business, the ability to unlock them in a sustainable way, and we're a responsible and reliable producer who will deliver value to all our stakeholders. Thank you for your attention.