ii view: output down but Antofagasta bullish amid copper boom

First-quarter production update to 31 March

• Copper production down 8% from a year ago to 143 kilo tonnes (kt)
• Molybdenum output down 3% to 3 kt
• Gold production up 8% to 46.5 kilo ounces (kz)

Guidance:

• Continues to expect annual copper production of between 650,000 and 700,000 tonnes
• Full year cost expectation unchanged but depends on fuel prices returning to January levels by next quarter (Q2)

Chief executive Iván Arriagada said:

"As we move through the year, we expect copper production to increase quarter‑on‑quarter, supported by higher ore processing rates and improving grades at Los Pelambres, in line with the mine plan.

"Against a backdrop of higher energy prices, we remain focused on safety, operational excellence, disciplined cost control and the timely execution of our growth and development projects.”

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ii round-up:

Antofagasta (LSE:ANTO) today reported first-quarter copper production marginally ahead of City forecasts, with the miner maintaining annual production and cost estimates for 2026.

First-quarter copper output of 143 kt fell 8% from a year ago, with the Chilean producer reiterating full year output hopes of 650-700 kt. That compares with 653.7 kt in 2025. Annual cost guidance of up to $2.50 per pound is unchanged, although that is dependent on fuel prices returning to January levels come the second quarter.

Shares in the FTSE 100 company rose 2% in UK trading having come into this latest news up by close to a fifth so far in 2026, similar to diversified miner Rio Tinto Ordinary Shares (LSE:RIO). The price of copper is up around 8% year to date, with the FTSE 100 index gaining by almost 7%. 

Antofagasta owns major stakes in and operates four copper mines in Chile. Major construction works at both Centinela and Los Pelambres leave the miner predicting a near one-third increase in copper production over the medium term.

Management also recently expressed an interest in evaluating potential growth prospects in Argentina. Quarterly production of by-product molybdenum also fell 3% from a year ago to 3 kt, although with that for gold rising 8% to 46.5 kz.

The company maintains its estimate for capital expenditure of $3.4 billion in 2026, which is down from an expected peak of $3.7 billion in 2025. 

Accompanying management comments flagged no supply chain issues for the miner year-to-date, which is an encouraging operational performance at a time of major shipping disruption in the Middle East.  

 Anto’s AGM is set for 7 May with a Q2 production update due on 15 July. 

ii view:

Started as a railway operator in 1888, Antofagasta is now one of the world's largest pure-play copper producers. The FTSE 100 company has a mineral resource base of more than 21 billion tonnes, including more than 5 billion tonnes at each of its Los Pelambres and Centinela operations.

For investors, soaring energy prices pressuring consumer disposable incomes globally could result in an economic slowdown that impacts demand for copper. The miner’s own costs are subject to fuel price moves. A share price-to-net asset value comfortably above the three-year average may suggest the shares are not obviously cheap, while currency risks remain given commodities are priced in US dollars, its operations are in Chile and its shares are priced in sterling.

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To the upside, a focus on efficiency persists, with savings and productivity improvements of $115 million made in 2025. Ongoing construction projects are expected to see output rise by 30% over the medium term. A net debt-to-profits ratio of less than one points to a robust balance sheet, while there is also a modest prospective dividend yield of 1.4%.

On balance, and despite ongoing risks, government pushes towards energy transition and renewable energy systems that regularly use copper, will likely keep investors interested in this South American miner. 

Positives: 

• Expanding operations
• Focus on costs

Negatives:

• Less diverse commodity portfolio than many rivals
• Currency movements can hinder performance

The average rating of stock market analysts:

Hold