Antofagasta revels in rising copper demand as countries embrace net zero transition
Higher copper prices and sales have powered Antofagasta to bumper earnings over the first six months of trading this year, with the miner riding the wave of demand in the essential metal for renewable projects and electric vehicles.
Antofagasta is one of the world’s major copper producers, with its activities concentrated mainly in Chile where it now operates four copper mines – with full ownership stakes in three of them.
The FTSE 100 company expects to expand its copper production, with chief executive Ivan Arriagada recognising it was integral for electrification as countries transition to net zero and green energy – providing a long-term window of profitability.
He said: “Copper is the metal of electrification and therefore an integral part of the energy transition. We believe the long-term fundamentals for copper are very strong as demand is forecast to continue to grow over the coming years, and as incremental supply remains challenged.
“Our focus remains on growing production through our pipeline of projects safely and competitively, which will generate value for all our stakeholders.”
Copper production increased 10 per cent higher year on year at 295,000 tones – reflecting a 24 per cent increase in throughput at its Los Pelambres mines.
This powered surging revenues in 2023, climbed to $2.89bn in the first six months of trading – up 14.3 per cent on the same period last year – with pre-tax profits 12.5 per cent higher at $765m.
This was despite a rise in operating costs due persistent inflation and a stronger Chilean currency, with Antofagasta operating a prudent cash saving strategy that saved $60m through productivity improvements.
Overall, cash flow from operations was $1,29bn, down from $1,68bn in the first half of 2022, but this was attributed to working capital variance last year which has not been repeated – while capital expenditure has climbed to $1.02bn, 54 per cent of full year guidance.
Earnings per share are now set at 33.5 cents – 7.1 cents higher than the same period in 2022 – with an interim dividend of 11.7 cents per share.
The company is priced at 1,607p per share on the London Stock Exchange ahead of trading this morning.