Good morning everyone and welcome to Empresas Copec's 4th Quarter 2023 results conference call. Today's presentation and the 4th Quarter 2023 earnings release are available on the company's investor relations website: investor.empresascopec.cl. Before we begin, I would like to remind you that this presentation may include market outlooks and forward-looking statements, which are based on the beliefs and assumptions of Empresas Copec's management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Empresas Copec and could cause results to differ materially from those expressed in such forward-looking statements.
This presentation contains certain performance measures that have been adjusted with respect to IFRS definitions such as EBITDA. In this opportunity, questions will be received in written form. If you have a question, please write it down in the Q&A section. Please beware that your company's name should be visible for your question to be taken. I will now turn the call over to Mr. Rodrigo Huidobro, Chief Financial Officer of Empresas Copec. Please go ahead, sir.
Thank you very much. Hello everyone, and thank you for joining us in this session where we will be going through the financial results reported by Empresas Copec last week for the 4th Quarter 2023 and taking some questions that may come from you at the end of the presentation. For those purposes, I'm joined here today by people from our investor relations department led by Cristián Palacios and also people from Arauco's Finance Department led by Mr. Gianfranco Truffelo. They will be helping us out in tackling your questions at the end of the presentation. Please feel free to send your questions through the chat, the platform chat, whenever you wish, and we will be taking them at the end of the presentation. So having settled that, let me start flipping through the presentation that you can see on screen.
Let me briefly refer to the major highlights that took place that reflect the quarter that we are reporting. This is a quarter where we began to see a recovery with respect to the lows that we had seen in the first few quarters of the year 2023. We recorded a higher EBITDA quarter-over-quarter, and this is explained basically by recovery in the forestry sector driven by prices and also by costs. In forestry, we saw higher prices all across the board for all products, and together with that, we began to see a gradual trend towards normalizing our unit costs that had been extremely high during the rest of the year, essentially because of the MAPA starting up.
Year-on-year, however, we still see a reduced EBITDA, and that has to do with the drop in prices that we can see in all segments and also with the higher costs that we have been recording because of the startup of MAPA. Non-operationally speaking, we also saw some positive effects stemming essentially from a positive revaluation of biological assets and also from some compensations related to insurance. In the energy segment, we also saw a higher EBITDA compared to both the preceding quarter and also the quarter in 2022, and that has to do essentially with higher margins, which in turn stem from more positive inventory revaluation and also a more positive industrial margin Q-on-Q.
In terms of developments and projects, Arauco announced during the quarter an agreement with Klabin in Brazil in order to go ahead with the sale of forestry assets for a total of almost $1.2 billion. We also completed the operation, the first year of operations of MAPA, Arauco's Line 3, with a total production of 802,000 tons during 2023. In relation to ESG, as usual, we have several milestones here. We continue to develop these dimensions of the business, which are now totally integrated into our business decisions. We made it into the S&P Sustainability Yearbook and also into the Dow Jones Sustainability Index in this last case for several years in a row. Our subsidiary company, Copec, obtained a $200 million green loan for investment into energy transition.
And finally, Copec as well announced its venture into two other companies with an investment into sustainable fuels and also an agreement for battery exchange stations. Let me go into the numbers. So we recorded an EBITDA of $636 million, which is up 4.5% Q on Q, however, still down with respect to the quarter last year. In terms of net income, we are recovering from the loss that we recorded in the third quarter 2023 and recorded a net income of $166 million. EBITDA has been, as you can see in the graph there, of course, at levels which are much lower than the very interesting levels that we recorded at some point during 2022, during the beginning, first half of 2022. But we are beginning to show a recovery with respect to the lows that we recorded by mid-2023.
So positive trend with respect to the immediately preceding quarters. The main variations of EBITDA are shown on screen. Copec has a positive margin with respect to what it recorded in the end of 2022. This, as I said before, comes essentially from higher commercial margins and also a positive inventory revaluation that is offset to some extent by or more than offset, really, by a drop in Arauco, which has to do, as we said, with lower prices when compared to the fourth quarter 2022 and also higher costs. To the right-hand side, you can see the composition of EBITDA, and this is pretty much in line with historical averages, possibly with a higher representation for the energy sector since Arauco has shown a decreased EBITDA during this year.
But anyhow, Arauco, Copec, and are still explaining more than 90% of the total EBITDA, as usual. Net income is shown on screen here, $166, as I said before. The main variations are shown to the left-hand side, coming from Copec with a better operational result and also the recording of the net income corresponding to the sale of MAPCO, which finally took place, was closed during the fourth quarter 2023. Arauco, in turn, shows interesting non-operational effects, which essentially have to do with revaluation of biological assets and also insurance compensation. Moving into more detail for the consolidated income statement, you can see there that we ended up with a net income of $166 million, an increase with respect to the comparable quarter last year, to the comparable quarter in 2022, $175 million of increase in net income.
That has to do with an increase in non-operating income, essentially, once again, having to do with revaluation of biological assets, insurance compensation, and also with some non-recurring effects related to write-offs, specifically of assets in Argentina that took place during the fourth quarter 2022 and that are not here during the fourth quarter 2023. So that's part of the increase, all of that offset by some unfavorable exchange rate differences. At the operating level, once again, forestry division going slightly down because of lower prices and higher costs, but offset to a certain extent by the energy division where Copec has recorded a higher margin related to commercial positive trends and also to favorable inventory revaluation. Together with that, we recorded a gain for discontinued operations, which is the result, the final result of the sale of MAPCO, $72 million, as shown in the consolidated income statement.
This has to do with the closing of the transaction that we had previously announced. Finally, some income taxes that increased with respect to the comparable quarter last year or in year 2022, and that has to do with some deferred taxes that are shown in relation to the classification of Arauco forests in Brazil as available for sale. Financial ratios are shown on screen. We can see that net financial debt to EBITDA went up gradually during 2023, up to a high point of 4x. And we started to revert that by the fourth quarter 2023. A good trend in the last part of the year, coming down from 4 to 3.9. That has to do essentially with lower net debt in the later part of the year.
EBITDA margin went up slightly with respect to the third quarter 2023, but still lower than the levels that we recorded in 2022 for revisions that we already have specified. In terms of maturities, we continue to have a debt that is distributed during several years. However, we are facing some important maturities during year 2024. We are already preparing ourselves to face those maturities with different strategies. Now, moving on to some further detail regarding each of the divisions. Let me go into forestry first, where Arauco recorded an EBITDA of $309 million, which is, of course, lower than the $408 million recorded in the fourth quarter 2022, but represents recovery with respect to the figures that Arauco attained in the second and third quarters of 2023. The trend is a good trend.
You can see it in the graph down there with EBITDA increasing over the last three quarters. The drivers for EBITDA going down with respect to 2022 are essentially a drop in pulp, panels, and sawtimber prices. So all across the board, we see lower prices. In the case of panels specifically, we see lower volumes, but that is offset by higher volumes in pulp and sawtimber, higher volumes in pulp, of course, coming from the MAPA, the Line 3 operation. And finally, increased unit selling costs in hardwood, and that has to do essentially with the ramp-up of MAPA. So costs gradually beginning to normalize, but still not at the long-term level because MAPA is in the fourth quarter still ramping up. In non-operating terms, we got insurance payment from Valdivia and Constitución Mills and also a positive asset revaluation effect in the last part of the year.
Offsetting that, we had higher exchange rate differences, essentially coming from Argentina and having to do with a strong depreciation of the Argentine peso that took place during the last part of the year in Argentina. That hurt, of course, our assets that are denominated in Argentine pesos. Together with that, we saw financial expenses that went up in all of our divisions, but specifically in the forestry sector. And that has to do essentially with higher rates, but also with the fact that up until 2022, we were still capitalizing interest related to the construction of MAPA, not anymore, of course. Higher taxes coming essentially from the reclassification of forestry assets in Brazil to the line of assets held for sale. In pulp, we saw Q on Q EBITDA going up. You can see EBITDA as reported by Arauco.
You can see that EBITDA went up from CLP 144 in 3Q to CLP 272 in 4Q. So a significant recovery in EBITDA coming from pulp, which has to do essentially with higher prices and also with lower costs. You can see there that costs for the different fibers went down, which is especially notable in the case of bleached hardwoods, which has to do with the ramp-up of MAPA. Year-on-year, we still see lower prices, of course, and also higher costs. Therefore, EBITDA is still down with respect to 4Q 2022 in pulp. Volumes have gone considerably up with respect to the fourth quarter 2022, 55%-56% up, and that has to do with the beginning of operations at Line 3. In terms of the pulp market, you can see that the market improved throughout the quarter.
We started from a very weak point in terms of inventories and also in terms of prices, but gradually this began to normalize. Global inventories dropped gradually. Now you can see in the graph that they're actually at levels that are even below the long-term levels. Demand held steady in China and also began to recover quite strongly in Europe. That's been probably the most important change over the last two months. Europe saw a period of weakness during 2023, but by the end of the year, it began to recover very strongly and caused prices in Europe and also in China to a certain extent to start picking up from the very depressed levels that they reached at some point during the year. In terms of dissolving prices, the average prices increased during the year for dissolving.
In terms of production, you can see in the graph down in the page to the left-hand side, you can see that we reached almost 300,000 tons at Line 3, MAPA operation, 300,000. So this is gradually increasing and gradually approaching full capacity. Regarding the outlook for pulp, we have seen a stable situation in terms of prices. You can see that prices are quite stable, around $615 in the case of hardwood and between $90 and $100 more than that in the case of softwood. We have seen demand stabilizing in China after the Chinese New Year and paper mills gradually restarting operations. European market continuing to improve. So still a very strong demand in the European market with potentially some further price increases there. So all in all, for the time being, we see stability and good trends in Europe.
In terms of wood products, we have seen a very interesting movement here. We went down from the very high levels that we recorded in the years immediately following the pandemic. We came to levels of around $300 million or even more per quarter. This has dropped to these levels that we are seeing now, which are between $130 million and $150 million and which are clearly more in line with what we have seen historically in this division. So once again, $138 million, pretty much in line with the historical levels. We should see, for the time being, we are seeing stability in these levels of EBITDA going forward. No significant movement here either in volumes or prices, slight drop in volume sales in panels during the last quarter when compared with the final quarter of 2022.
Going to our main markets here, North America is getting to approximately 50% of total revenues. In general, we see stability here. Some markets are more promising than others. In the case of MDF, it's a little challenging because producers have significant stocks. Supply is quite abundant there. But we could see a gradual increase and recovery in demand in the first half of 2024. In particle board, we see a similar situation, however, with less stock in the hands of producers and therefore less challenging than MDF. We are expecting stability here and volumes eventually reaching full capacity as the year advances. In remanufactured products, we could see a slight improvement, essentially due to seasonality. In plywood, we are seeing stability with a balanced market in North America. Housing starts at a level which is not clearly below the long-term average for this index.
So we could eventually see also a recovery there. Our next most important market is Latin America, which represents almost 40% of our sales. In the case of Brazil, it has been a challenging market for many years, some overcapacity there. However, we were seeing some interesting trends there with a potential room for improvement there and eventually construction picking up a bit with the decrease in interest rates. In Chile, we are seeing uncertainty in economic terms. Some areas of the economy, such as construction, which are linked to this panel segment and wood segment, are a little weak and therefore still uncertain how the panel market in Chile is going to evolve. We are seeing, on the other side, some interesting trends in home improvement. So some uncertainty in Chile regarding the evolution. In Argentina, it has been challenging because of the high inflation.
It has been hard to keep up with inflation in prices in order to stick to our levels when measured in US dollars. However, we still see a positive outlook for MDF, particularly. In the case of PB, we are seeing an environment that is more challenging. The other markets, Asia and Europe, are much less relevant in terms of our exposure to them. However, we in general see a stable situation in them as well. So in general, across the board, stability for wood products with some positive signals in some markets and some specific products. Moving on to energy. Give me one second here, please. Moving on to energy here. We are seeing, in general, stability. Copec recorded an EBITDA when measured in the functional currency of this business, which is local Chilean pesos.
We saw an EBITDA of CLP 244 billion, which compares very positively with the CLP 195 billion that we recorded at the end of 2022. So it's a good EBITDA level when measured in historical terms. You can see the graph there. And this has been driven essentially by higher gross margin, also an improved inventory revaluation in Chile in particular, and also an improved commercial margin in Chile, together with an increase in volumes and margins of lubricants in Terpel. Lubricants is doing very well in Colombia, Peru, and Ecuador. The fruits of our acquisition of the ExxonMobil assets back in 2018 approximately are beginning to show. They were interrupted during the pandemic, but now we're beginning to see good results of this lubricant segment in Terpel. Volumes have been weak when compared with the last quarter last year.
However, we saw a recovery in volumes with respect to the third quarter 2023, stable in general, but to some extent affected by the economic situation, which is a little weak in Chile and Colombia. In Terpel, we saw an unfavorable inventory revaluation effect and also a low industrial margin in Chile. Regarding the non-recurrent effect, we also had one very important effect in this particular quarter, which is the sale of MAPCO. What we see here is the effect recorded by the Copec subsidiary, $162 billion. Not all of that was recorded at the parent company level. So you won't see all of that in our consolidated statements. And that has to do with the fact that part of the result comes from foreign exchange equity reserves that were reclassified into the net income of the subsidiary company.
But according to accounting rules, we do not do that at the parent company level because the functional currency of the parent company is the US dollar. So the result at the parent company level is lower. We saw it a couple of slides ago, approximately $72 million at the parent company level, but it's the whole CLP 162 billion in the subsidiary company. In terms of market share and operationally speaking, Copec has shown stability, a 58.2% market share as of November 2023, which is pretty much in line with the historical level. So not a lot of movement there, not a lot of news there. The fuels volumes are doing okay with respect to the third quarter, but a little lower than the fourth quarter 2022. And this is driven by the industrial channel dropping 1.9% and the gas stations decreasing 0.5%.
This has to do essentially with a high base of comparison. During the pandemic, we did very well in terms of volumes. However, we are seeing that this has weakened a little bit because of the drop from those very high levels and also in relation to the economic activity. In general, and speaking of the outlook for this market, we are seeing stability as usual. You know that this is a stable market in general. It's driven by the growth of volumes, essentially. Commercial margins tend to be very stable when measured in local currency. However, we had lagged a little bit behind in terms of commercial margins because of the very high inflations that we had seen in the previous years. We are gradually starting to normalize those margin levels, gradually beginning to keep up with inflation.
Inflation is getting to more reasonable levels now in Chile and Colombia, and therefore margins are gradually beginning to keep up with those new levels of inflation. We do have, however, some elements of volatility here, as we always say, having to do with the revaluation of inventories, which in turn has to do with the ups and downs of oil markets and also having to do with industrial margins, which are very volatile for several reasons, among them volumes and clients that enter and go out of the market. But all in all, we could see stable commercial margins going forward. Volumes, as we saw, are potentially affected by the ups and downs in economic activity.
We continue to believe that we have a very good competitive positioning in Chile, which is based on customer preference and also on a very good network positioning and locations of our gas stations, essentially. Let me move to Terpel. Terpel, as is shown on screen, reached an EBITDA level of COP 378 billion, 378, which compares positively with the fourth quarter 2022, but negatively with the third quarter 2023, which was the highest EBITDA that Terpel has ever recorded and had to do with a very substantial effect of inventory revaluation that took place during the third quarter 2023, but still a good EBITDA when measured in historical terms.
The increase with respect to 2022 is explained partially by an increase of margins and volumes in lubricants, as we said before, doing well in that segment in particular, offset to some extent by an unfavorable inventory revaluation in the case of Colombia and Panama, basically. Liquid fuels have decreased a bit, 4% all in all. This is explained by a drop in Colombia, essentially having to do with a weaker economic activity, but also with some specific factors affecting some of the industries in which Terpel distributes fuels. Aviation, for example, has seen some players leaving the market, and therefore that explains part of the drop in volumes in Colombia. Panama has also been affected by specific factors taking place during the second part of the year. Social unrest, in part, has explained part of the drop in volumes in Panama.
Together with that, the situation in the Panama Canal as well has affected volumes going to the bunkering business, of course. In terms of non-operating income and as we have seen across the board, we are seeing increased financial costs having to do with inflation and also with increased rates. Let us move to Abastible. This is our LPG division. As you can see in the evolution of EBITDA there, it compares very well. CLP 35 billion compares very well with the figure recorded in the fourth quarter 2022. However, there's a decrease when compared with the third quarter 2023, which has to do essentially with seasonality. The second and third quarter each year are the highest in terms of EBITDA, usually record the highest EBITDA for LPG, basically because of temperature of the winter season in our most important market, which is Chile.
The trend is positive, though. The long-term trend is positive. We have seen LPG volumes and margins recovering gradually from the situation that hit the business during 2021 and the beginning of 2022, essentially when propane prices globally were very high. That basically caused volumes to be reduced and also margins, final commercial margins to be reduced because of these very high international prices of propane. That trend has gradually been reverted, and we are gradually beginning to trend towards a more normal level of EBITDA generation. Together with that, we have seen a good situation in general in terms of volumes all across our geographies, so Chile, Colombia, Peru, and Ecuador, in general, doing very well. Some more details here.
Chile, in the case of margins, we have seen basically a very good situation for the bulk segment and also in the case of volumes for the bulk segment explained by new clients that have been permanently coming in and also with the specific situation of some particular industries. In the case of Colombia, a slight drop in volumes having to do again with a slightly weaker economic situation in general in Colombia. However, margins trending up because of these propane prices going down internationally, as I said before. Peru has performed very well in both channels, bulk and bottled. Bulk channel hit to a certain extent over the last few quarters by a particular situation in the poultry industry, which is very strong in Peru in terms of LPG consumption.
But in general, the trend is very positive for our Solgas, which is our division in the Peruvian market, and Ecuador in general with a good performance of the bulk segment related to diesel substitution, essentially. And finally, in terms of results, moving on to our other investments, the most important among these is by far Cumbres Andinas, the owner of Mina Justa in Peru, the copper mine in Peru. Mina Justa recorded an EBITDA for the quarter that was $213, a little bit below the $252 that we recorded in the fourth quarter 2022. That has to do with an increased level of costs and also a decreased level of physical sales when compared with the third quarter, the quarter-on-quarter comparison, a decreased level of physical sales.
In general, with respect to the fourth quarter 2022, we see higher costs, which relate to a lower grade of the mineral that is being treated at this point in time according to the mining plan. We could see these increased levels of costs for some additional quarters, and that has to do strictly with the part of the mine that we're exploiting right now according to the mining plan. So we could see levels of 1.6 for the following or approximately 1.6 for the following few quarters. But in the long run, we should revert to the 1.4 that we have communicated as our long-term cost level. So once again, strictly because of the part that we are mining right now, we saw increased levels of cost. We could see a slightly reduced production as well during some quarters for the same reason.
But we should quickly revert to the production and the cash costs that we have indicated historically. All in all, however, a very good performance for Mina Justa with an EBITDA of more than $200 million in the quarter. We have 40% of this just to remind you, 40% stake in Mina Justa as shareholders. So this is not consolidating in our balance sheet, nor in our EBITDA. Our other investments are quite stable, as usual, Sonacol. The fishing division has lightly made progress in operational terms. EBITDA has been gradually going up in the fishing division. And our natural gas divisions are, as usual, quite stable. Moving on to the highlights of the quarter in terms of milestones achieved, we communicated through Arauco.
Arauco issued an essential pact where it communicated the agreement with Klabin for the sale of approximately 85,000 hectares of forest lands and plantations in Brazil. These are plantations that are, in general, very close to Klabin operations. They do not have to do at all with our Sucuriú project. They are located essentially in the Paraná state of Brazil. So it makes a lot of sense for Klabin given the fact that operations are very close in that region. The total price agreed was $1.16 billion. This is subject to usual adjustments in these kind of transactions. And as of now, we estimate that the positive effect in Arauco's result could be around $130 million after taxes. MAPA completes line three of Arauco, completes the first year of operations. As expected, a year in which Arauco has been ramping up operations at MAPA.
The total production reached during the year was 802,000 tons, pretty much in line with what Arauco has announced at the beginning of the year and very satisfactory in terms of quality achieved as well. So MAPA startup and ramping up going well. Moving on to ESG, as usual, several developments here. The subsidiary company, Copec, closed a green loan for $200 million, which will be devoted specifically for energy transition. And this has to do with some investments that have already taken place over the last few years and that will be taking place over the next few quarters and that are related to our ventures in electromobility, solar panels, and batteries, essentially. So Copec Voltex, which is electromobility; Flux Solar, which is our solar panel venture; and also Ampere Energy, which is our battery and intelligent energy management division.
All of them are going to be received and have been receiving over the last few years part of these proceeds from the green loan. In conjunction with that, Copec has announced some further ventures into alternative energies through the Copec Venture Capital. It went ahead with a small investment in a company called INERATEC. This is a German company that has developed a technology for producing synthetic fuels or sustainable fuels starting from renewable carbon-neutral energies and from CO2. So this is very interesting for Copec. Copec would eventually distribute this type of fuels and mix them with conventional fuels. And this type of fuels is very attractive, essentially, for those industries that cannot be easily electrified, such as aviation or sea transportation and other industries of that type. Additionally, Copec entered into an agreement with a Taiwanese startup company called Gogoro.
This is a business model where battery exchange stations are installed in the network of gas stations of the conventional fuels companies in order to replace batteries for motorcycles specifically. So this should greatly reduce the charging times. There will be no charging times. There are just replacement times for the motorcycles. Santiago, through Copec, and Bogotá through Terpel, are planned as the first cities in Latin America to have access to this type of business model with this battery exchange station. In relation to awards and indexes, we made it again into the Dow Jones Sustainability Index for the eighth year in a row. And we also made it into the S&P Sustainability Yearbook, which is a very thorough process driven by S&P where more than 9,000 companies worldwide are analyzed. So very good achievements here with these recognitions of these two very well-reputed companies.
Arauco has received an award, Zero Waste Award. This has been in recognition of the cultural change that Arauco has carried forward in its companies in relation to circular economy. So very good progress here and in line with Arauco's goal to achieve zero waste by 2030. This is a very good recognition that Arauco got during the quarter. And finally, and once again, Empresas Copec was awarded the La Voz del Mercado Award, a very important prize that is given in Chile by EY, the Santiago Stock Exchange, and the Institute of Directors in Chile to those companies showing the best corporate governance. And once again, and for the fifth year in a row, we were highlighted as one of the three Chilean firms with the best corporate governance.
So very satisfied with this recognition, which was the result of a survey that was carried forward among more than 370 board members, investors, analysts, and other experts. Together with that, we also came out with a very good position in the Merco ranking, another well-reputed ranking in Chile. That's it. That's the information we had prepared for you. So having said all that, I would like to open up the floor for the Q&A. As we said before, Cristián will be taking all of the questions that you have posed through the chat platform, the question chat that we have in the web platform. And Cristián will be handing over both to Gianfranco and myself in order to answer the questions that you might have. Please go ahead, Cristián. Thank you.
Thank you, Rodrigo. Thank you all for joining this webcast. I'm going to start with some questions in forestry. The first two come from Jens Spiess at Morgan Stanley. Gianfranco Truffelo, if you could, please give some color on your pulp negotiations in China for March and if you have been able to allocate all the volumes.
Yes, we did finalize all the negotiations for China for March. We kept our prices unchanged. So that means eucalyptus price for $650 and long fiber $745 and $690 for unbleached. And we were able to allocate all the volume. So that is for China for March. And now it comes the Shanghai Pulp Week . So there are going to be more talks with clients. But in our case, we have all our volume already sold at the same prices as February.
And secondly, how much incremental volumes do you expect from MAPA in 2024? And if you can provide some guidance in terms of production and shipments versus 2023, basically.
Yes, of course. I mean, we produced 800,000 tons in 2023 in Line 3, MAPA. And we sold about 700,000 tons. So the difference, the 100,000, is the stock buildup. That means more or less a month of production. So that is normal. And for 2024, we are planning to go almost to full capacity, a little bit less than the 1.5 because we have a stoppage in May. So that will bring probably 1.45 million tons, something like that. And we expect to sell the same amount, more or less, because we already have the inventory buildup. So that will mean that our sales will be probably 800,000 tons more than 2023. That's a plan. Of course, it depends on what happens through the year. But at this moment, the mill is reaching the final stages of ramp-up.
I have some questions from Leonardo Correa at Bank of America. The first one also in forestry. Arauco reported some improvements in terms of cash costs, but they are still elevated. So he wants to explore what is a more normalized level for cash costs going forward.
Well, as you probably know, 2023 was very difficult, not only for the prices of pulp that went down in the middle of the year, but we had the forest fires. We also had the ramp-up of MAPA. We had part of our mill stopped for some months, starting with Constitución at the beginning of the year and then Valdivia stopping for four months during the year to repair the dryer. Okay. Part of that was compensated by insurance claims. But of course, that's not reflected in the cost. It goes through other income. So it's not a very good year to compare cash costs. So we expect that in 2024, with having more production, we're not going to heavily cannibalize also, which was stopped. We're going to have probably a normal operation in the mills. The cash costs should go down.
And we'll have a more proportion of a more efficient mill, which is MAPA. So that will bring our cash costs to more normal levels. I would say it depends on the mill. But our cash costs should be close to $300, more or less. And of course, you have to compare that. We're talking short fiber. Differently from the Brazilians. I mean, there's different calculations, how they do it and how we do it. But we should be back to normal levels for our plant operating normally, about $300, something like that, cash cost.
Thank you, Gianfranco. I'm going to skip the next one because it was about price negotiations for March, already answered. And Rodrigo, on energy, if you can provide some outlook in terms of volumes for the year and if you can quantify the effect of inventory revaluation in 4Q.
Yeah, we briefly commented on that during the presentation. Volumes are very high. It's very difficult to provide an outlook on that. It's usually very related to the economic activity. We are seeing two things. We are seeing a high base of volumes, which took place immediately following the pandemic. And therefore, the base of comparison is very high. And also, we are seeing a slightly decreased economic activity in our main geographies, in Chile and Colombia. And therefore, as we saw in the last quarter, when compared to the quarter in 2022, we could see slight drops in volumes. But however, we saw a reversion of that trend in the last part of the year when volumes in the fourth quarter increased with respect to the third quarter. So we do not expect volumes to grow very significantly. It could be in line with economic activity.
It should be in line. Therefore, they should be very stable with no significant variations, either up or down in general. The inventory effect is, as you have seen, very volatile. It was very significant during 2022. It was much less significant during 2023. As a matter of fact, in the fourth quarter that we have just reported, the total inventory effect was a little negative, considering Chile and Colombia, a little negative, and somewhere around $10 million-$15 million negative. That compares also negatively with both the preceding quarter and the fourth quarter 2022. That is also very hard to predict because it has to do with the variations in oil prices and the exact level of inventories that we have when those variations take place. We are never very precise on the outlook for that either.
Rather, we just focus on communicating the drivers of that effect. You're muted, Cristián.
Finally, from Leonardo, if you can comment, Rodrigo, on Mina Justa, what drove C1 cash cost increase and what can we expect for cash costs going forward?
Yeah, well, we briefly touched on that also during the presentation. Cash cost increase was motivated strictly because of the fact that we are now mining a part of the property of the mining property that has lower grades. And therefore, for the same amount of ore treated, we are yielding less final product. And therefore, cash costs recorded in the quarter were up to $1.7. We expect this to hold on for a while. So most probably during 2024, we will be a little bit above the $1.4 that we had given out as a long-term figure for the cash cost. Rather, we should be in the vicinity of $1.6 because of this particular part of the mine that has a lower grade. And together with that, we should also be yielding a lower production.
Rather than $140-$150 as we did during 2023, we should go slightly down to $120 or $130 during year 2024 specifically. Then we should go back to the long-term trends, which are a cash cost in the vicinity of $1.4. But that's essentially the driver for the increasing costs during the fourth quarter 2023.
Thank you, Rodrigo. Also, in Mina Justa, if you can provide the status of the new project, Justa Subterránea, is Omar Avellaneda at Prima AFP and César Pérez at BTG asking sort of the same. And if you can provide some guidance in terms of production for next years.
Yeah, production, as we said before, is a little down in 2024. But then we should recover following that year. In terms of Mina Justa Subterránea, that's a project that we announced last quarter. There are no significant developments to communicate at this point in time that will be up for final approval by the board during the first half of this year and potentially beginning construction either by the end of 2024 or beginning of 2025. That has to do with a project that will involve a CapEx of around $400 million and that will yield an increase in the lifetime of the mine of approximately five years and an increase in total production across the lifetime of the mine of approximately 500,000 tons of final products. So interesting project.
Should be very interesting because what it does is basically extend the life of the mine and at the same time, allow production to be more stable along the life cycle of the mine. Those two factors, of course, turn into attractive profitability for the investment. This should be up, as I said before, up for final approval during the first few months of this year. Whenever that happens, we'll let you know.
Next one comes from Vicente Chaparro at Consorcio. Gianfranco, if you can comment about the difference in price negotiations between Arauco and Suzano for March.
Well, I cannot comment about our competitor strategies for pricing. I mean, it's their determination. I mean, in our case, at the moment we decide our pricing strategy, we thought that the market in China wasn't prepared for an increasing pricing. I mean, we didn't see a lot of room for that. I mean, probably for them, the situation in terms of overselling of their products, inventory is different. And I cannot, I mean, really comment. I mean, we will see if they are succeeding in putting their volume. And if they do, probably we're going to be more optimistic for April. But I cannot comment on their decision to increase pricing.
Another one from Vicente, if you can provide an update on Sucuriú project.
Well, in Sucuriú, we continue working. I mean, it's a lot of things to do there. We already made the conceptual engineering. We obtained the environmental approvals for construction. But we are working on the logistics solution. We continue planting all the year and obtaining the land to plant the trees. And we are preparing a feasibility study, doing the basic engineering, negotiating alternatives for port terminal. So it's a lot of things to do and to be prepared to get quotes from the equipment manufacturers and also an estimation of construction in order to have all the data to put in the feasibility study to present to the board at the end of the year. At that time, we will decide if we are ready to go ahead or not. But we still have the rest of the year.
We are, at this moment, up to schedule and doing all the tasks that we need to do. There's a team working there. We are happy with the progress. But we still need more inputs for the decision that we'll get at the end of the year.
Thank you, Gianfranco. For Rodrigo, Rodrigo Godoy from Credicorp Capital, if you can provide some color on the CapEx for 2024 and if you can provide some details and breakdown by business.
Yeah, we will be, as usual and as we have traditionally done, we will be communicating a final figure in our shareholders' meeting that is going to be held in April. I can nevertheless anticipate a range. The range, as it stands currently, is going to be around $1.5 billion-$1.8 billion. That is made up of a maintenance CapEx of around $900 million, which is in line with our base of assets. That also includes new projects in forestry. One of them is Zitácuaro, the panel mill in Mexico, which is going to start construction this year together with plantations related to Sucuriú and plantations in other geographies as well, all of that for a total of approximately $500 million or $600 million.
New initiatives in fuels and energy in general for this year, outside of the normal investments, we are devoting, as usual, $50-$70 million approximately for new initiatives in energy transition. The rest is basically comprised of many smaller projects, which are efficiency projects related to optimization and cost reduction, basically, which are very interesting, very attractive, but which can, at the same time, be executed or not according to how the market develops and how the financial situation of the company develops. That's it. We will be giving out more detail, as I said, in our shareholders' meeting in April.
Constanza González at Quest Capital is asking, in relation to Terpel, what is the company's strategy in this business and if there are plans to increase or continue to grow the network of convenience stores not only in Colombia but in other countries.
Yeah, well, Terpel, many of the elements that we envisioned when we initially acquired Terpel many years ago continue to hold. So we still see room for improving some elements in Terpel. And actually, what you mentioned in terms of convenience stores is one of them. The penetration of convenience stores in Colombia, and particularly in the network of gas stations, is much lower than in Chile. So we do have some work to do there. And in the particular case of convenience stores, yes, we are looking at that business segment very intently. It is a good business segment. Copec in Chile and Terpel in Colombia have a very good brand positioning. And therefore, it might make sense. And we are beginning to do that, to roll out.
We are doing some pilot projects in order to explore the possibility of rolling out convenience stores outside of the gas station networks. We have a few, and they are performing well. So that's a business development line that makes sense to analyze. And we are certainly going to analyze that and take a look at that. So yeah, in both cases, Chile and Colombia. Terpel is also complementing the previous question in relation to the Terpel strategy. Terpel is also beginning to follow Copec in terms of energy transition. So many of the initiatives that Copec is doing here in Chile, we are replicating them in Colombia through Terpel and therefore positioning ourselves as a pioneer in electromobility and energy transition.
I have two questions from Gabriel Simões at Goldman Sachs. They were already answered. One regarding cash cost at MAPA and the second on Mina Justa. So I'm going to skip it. Eduardo Palma at Bice Inversiones, if you can provide some expectations for this year if energy sector will continue to offset the forestry sector.
No, that will depend on the relative evolution of the two segments. In energy, as usual, we expect stability in general, potentially modified by the growth rates that we attain in that segment. But in general, roughly the same level of impact we have recorded over the last few years. Whereas in forestry, we could expect some significant variations stemming essentially from the contribution of MAPA, of Arauco's Line 3. But as I said, everything will depend on the evolution of prices going forward, cost levels, and so on. So it's very hard to tell.
Gianfranco, if you can provide an estimated CapEx per ton regarding Sucuriú?
Well, that's a good question. I mean, we are doing our initial calculations for like a $3.5 billion investment, basically on estimations of other projects that have been finalized. But that will only be more real once we start getting quotes from equipment manufacturers. So I cannot tell if that's going to be. I hope it's going to be lower because that helps into the valuation. But we're working, at this point, with $3.5 billion as a base number for the investment, total investment including construction and equipment.
Perfect.
Sorry. It is a 2.5 million ton plan. You have to divide that to get an estimate of per ton investment.
Rosario Achondo at Compass Group is asking for some guidance in terms of net debt to EBITDA for 2024.
Well, at this point, I mean, we expect to be close to three times, probably. Of course, we're going to depend on pricing. We are using, in our forecast, a conservative approach on pricing for the second semester at this moment. We could be wrong. But I think that at least, especially because of the selling of assets in Brazil, we're going to get a good influx of cash that will help reduce net debt. And also, we will have a better EBITDA that will help improve the leverage. But I think, of course, we will get down. Our initial estimate will be closer to three times. But it will depend a lot on the evolution of pricing, especially for the second half of the year because, I mean, there's some trend going on in terms of the first quarter and probably the second quarter.
So the big question mark is what's going to happen in the second half of the year in terms of pricing of pulp.
Rodrigo, if you can comment the same in terms of leverage but at the consolidated level, please.
Yeah, that will have to do essentially with the evolution of EBITDA. But what Gianfranco says finally holds. So if it's going to be $3.4 for the forestry sector, then we should expect the consolidated level to be around $2.5 or so.
Thank you. The last question comes from Alfonso Salazar at Scotiabank. This is for Rodrigo. Is Copec reviewing its capital allocation strategy due to the lower EV adoption that is now expected globally?
Well, we do that on a permanent basis. The good thing about the strategy we adopted in order to face the electromobility challenge is that it's very flexible. We acknowledge that there is a strong threat coming from electromobility. It's a structural and transformational threat. So what we have decided to do is start preparing ourselves for the new scenario immediately and are working along several lines. First of all, we want to position ourselves as leaders in electromobility in our markets. Together with that, we are exploring transformational opportunities related to energy, mobility, and convenience stores. We're also looking for some ventures that can complement our existing business model in order to transform that business model. Among them, Blue Express or other initiatives of the sort.
So the final objective is basically to open up options to complement our existing assets and offer new services to our clients, develop skills and capacities, and be prepared to grab opportunities as they come along. This scenario is going to be very volatile. It is true that we have received information over the last few years, possibly, that may lead us to believe that the transition to electromobility may take a while longer than we initially projected. But we may also receive news in the other sense. This has been very volatile over time. So our strategy is to open up options, basically be very flexible, be prepared for scaling up in whatever technology turns out to be the winning technology or whatever business model turns out the winning business model. So the answer is basically, yes, we are permanently revising what we are doing to face electromobility.
The way that we are doing it allows us to do so. There will be a lot of trial and error because nobody really knows where the energy market and particularly the car market is going to go. The way we've done it is to open up these options and be able to scale up whenever we have more clarity on the scenario going forward.
Thank you, Rodrigo. We don't have more questions. I'll turn it over to the operator.
This concludes the Q&A section. At this time, I would like to turn the floor back to Mr. Rodrigo Huidobro for any closing remarks.
Okay. Thank you all very much for joining us today. We expect to meet again at the beginning of May for taking a look at the results for the first quarter of 2024. Thank you very much, and have a good afternoon.
Thank you. This concludes today's presentation. You may disconnect now and have a nice day.