Antofagasta posts biggest profit margins since 2021

[Redator]

Antofagasta (LON: ANTO) posted a nearly 60% jump in half-year core earnings on Thursday, driven by higher copper production and stronger prices for the metal crucial to the energy transition.

Pretax profit rose to $1.16 billion from $712.6 million in the same period a year earlier. Earnings before interest, taxes, depreciation and amortization jumped 60% to $2.23 billion, while its Ebitda margin increased by 12% to 58.8%.

The Chilean miner attributed the gains to an 11% increase in copper output, lower cash costs, and higher prices for copper and gold. Copper production in the period reached 314,900 tonnes, largely on the back of increased output from the Centinela Concentrates and Los Pelambres plants.

First-half copper sales grew 17%, while gold sales surged 53%.

Antofagasta, majority-owned by Chile’s Luksic family, declared an interim dividend of 16.6 cents per share, more than double last year’s 7.9 cents. BMO analysts described the results as “solid,” with earnings meeting expectations but showing sequential improvement.

“The robust financial performance announced today places Antofagasta’s margins at the top end of global pure-play copper producers and the highest level achieved since 2021,” chief executive officer Ivan Arriagada said in the statement.

Four key projects

Arriagada projected more than 30% production growth in the medium term, supported by four major projects.

At Los Pelambres, work has begun to expand the desalination plant, extending mine life to 2051. 

At Centinela, construction continues on a second concentrator with capacity of 150,000 tonnes per day, targeted for first production in 2027. 

The Zaldivar mine received approval in May to extend its life to 2051, with a plan to shift from current water sources to seawater or third-party supplies by 2028.

The company is also running large-scale tests of its proprietary Cuprochlor-T® technology to extract copper from primary sulphide tailings.

The miner left production guidance unchanged at 660-700,000 tonnes, though Arriagada warned that maintenance at Los Pelambres in July and August could push output to the lower end of the range.

Antofagasta operates four copper mines in Chile and is pursuing the stalled Twin Metals project in Minnesota, which was blocked after former US President Joe Biden’s administration revoked permits over environmental concerns.

Arriagada said last month he saw “an opportunity” to advance Twin Metals after President Donald Trump moved to impose a 50% import tariff on copper.