Antofagasta’s $2B profit eclipsed by Chile copper woes

Antofagasta (LON: ANTO) has cut its 2026 copper production forecast after extreme weather shut its flagship Los Pelambres mine in Chile, overshadowing a 27% increase in first-half core earnings.The Chilean miner lowered its annual production guidance to 625,000-655,000 tonnes from 650,000-700,000 tonnes, a roughly 5% reduction at the midpoint. The revision followed heavy rain and snowfall in July that forced Los Pelambres to halt operations after Chile’s government declared a “state of catastrophe” in the Coquimbo Region, where the mine is located.Shares were 5.3% in mid-afternoon London trading on Thursday to 3,814 pence, underperforming other resources stocks. The company’s market value stands at almost £37.7 billion ($50 billion).The setback came despite stronger commodity prices lifting Antofagasta’s first-half results. Pretax profit jumped 72% from a year earlier to $2 billion, while earnings before interest, taxes, depreciation and amortization rose 27% to $2.84 billion. Operating cash flow increased 53% to $2.77 billion.Prices boostCopper prices rose 36% and gold gained 46%, helping offset lower production during the period.Antofagasta said the extreme weather did not significantly damage major infrastructure at Los Pelambres, although the company needs to repair some pipeline platforms and water-management systems.Citi analysts said the company’s “solid cash flow position” should help offset the negative impact of the production downgrade.BMO Capital Markets analyst Alexander Pearce said Antofagasta’s first-half results were slightly better than expected, beating the bank’s estimate by 5%.“Adjusted earnings of $847M (or $0.86/share) also beat our estimates by 15%, primarily reflecting lower cash costs and depreciation,” Pearce said. “The company ended the half with a net debt position of approximately $4B, up from $2.8B at the end of 2025.”Antofagasta declared an interim dividend of $0.30 per share, 16% above BMO’s $0.26 estimate and consistent with the company’s 35% payout policy. Pearce said the payment implies an annualized yield of about 1.1%.Chile challengesAntofagasta’s guidance cut adds to production concerns facing Chile’s copper industry as companies contend with operational setbacks and aging mines while trying to maintain and expand output.State-owned Codelco has issued a series of warnings over project development timelines and its longer-term production ambitions. It has also lowered its 2026 production guidance to about 1.34 million tonnes from roughly 1.37 million tonnes, rather than pursuing the 1.7 million-tonne target set by the previous CEO, Máximo Pacheco.Antofagasta’s immediate challenge is restoring Los Pelambres output while taking advantage of copper prices that helped deliver sharply higher earnings and cash flow in the first half.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com