Company has three business divisions: Mining, Transport and Water, being the first of them the most important. Antofagasta plc is one of the largest international copper producing companies in the industry. Its activities are mainly concentrated in Chile where it owns and operates three copper mines, Los Pelambres, El Tesoro and Michilla, with a total production of 498 thousand tonnes in 2004, at an average cash cost of 24.4 c/lb. The Groups mining division, Antofagasta Minerals, is also actively involved in exploration particularly in Chile and Peru. The transport division operates an extensive rail network servicing the important mining region of northern Chile, which is centred on the port of Antofagasta. The water division operates a concession for the distribution of water in this region.

SALES PER ACTIVITY (Data as of 31/12/2005)

Copper mining: 94%
Rail transport:   4%
Water:             2%

StockMarketWire.com
Antofagasta reports a strong third quarter, with copper production up 8.7% versus the previous three months and Antucoya reaching production capacity in August.

Group copper production for the year to date of 503,900 tonnes was 9.4% higher than in the same period last year, primarily due to new production from Zaldavar and Antucoya, offset by the closure of Michilla at the end of 2015

Gold production was 70,300 ounces in the quarter, a 33.1% increase on Q2 2016 largely due to higher gold grades at Centinela.

Molybdenum production at Los Pelambres was 1,900 tonnes in Q3 2016, compared to 1,600 tonnes in Q2 2016 with higher grades at Los Pelambres.

Chief executive Ivan Arriagada said: "Performance is expected to continue to improve during the final quarter of the year, with full year 2016 copper production expected to be close to the lower end of the original guidance range of 710,000 to 740,000 tonnes.

"Since becoming CEO I have continued to focus our efforts on reducing costs and improving operational efficiencies, and here again we are making good progress with net cash costs decreasing by 5.6% to $1.18/lb. We now expect cash costs for the full year to be $1.25/lb, 5c/lb lower than previously guided.

"As part of these efficiency programmes we have also reviewed our mine plans and wider operational activities to improve decision making and the accuracy of forecasting. This has involved a rigorous assessment of our plans with a focus on profitable tonnes and a higher level of certainty without compromising safety or operational standards. Following this review, production in 2017 is expected to be in the range of 685,000 to720,000 tonnes."

Slump in Antofagasta.

Shares in Antofagasta PLC (LON:ANTO) slumped by more than 6% in early trade on 26 October after the company’s operational update for the third quarter of 2016 indicated that full year production is likely to come in at the lower end of the previously announced 710,000-740,000 tonnes of copper.

That was in spite of a strong quarterly performance in which costs fell and production rose significantly. Net cash costs for the full year are now expected to come in at US$1.25 per pound, US$0.05 lower than previously anticipated, according to chief executive Ivan Arriagada.

But in the context of a copper market that remains weak in spite of price strength in other areas of the commodities complex, Antofagasta is now forecasting production to be in a lower range again next year, at between 685,000 and 710,000 tonnes.

As it is, analysts are not convinced Antofagasta will even hit its target this year.

“Antofagasta will have to have a very strong quarter to hit the bottom end of 2016 guidance,” said Liberum in a broader note on the copper sector that it issued following the Antofagasta results.

Liberum noted that previous guidance for 2017 from Antofagasta ran in the 750,000 tonne range, but it also pointed out that in the copper space Antofagasta isn’t the only cutting or missing targets.

Downgrades from BHP Billiton (LON:BLT), Rio Tinto (LON:RIO) and Freeport McMoRan (NYSE:FCX) combined with the new bottom-end numbers from Antofagasta will have taken 166,000 tonnes of forecast copper production out of the market by the year end, Liberum noted.

Even so, the market looks likely to remain in surplus until 2019, on the strength of current global production. Liberum is thus bearish on copper in general, and adds that pricing weakness is also likely to be exacerbated by dollar strength.

However, that call isn’t completely cut and dried. Ongoing protests at the massive Las Bambas copper mine in Peru, owned by the Chinese-backed MMG could curtail supply.

And there’s also the possibility that the ongoing Chinese property boom, which pundits are constantly calling an end to, may actually continue and drive up demand for copper.

If that’s the case, the financial impact of production downgrades may be off-set by copper price strength. But no-one in the market is holding their breath for that.

For its part, the other big player in copper, Glencore, is set to release third quarter production results on 3 November. We’ll probably get a further insight into the state of play then.

According to the FT, the declared short interest is c20%. Not sure if that's correct.

Exane BNP Paribas today downgrades its investment rating on Antofagasta PLC (LON:ANTO) to underperform (from neutral) and cut its price target to 435p (from 545p).

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 580p (from 575p).

StockMarketWire.com
Antofagasta says that following the closure of the Michilla mine at the end of 2015 it has today signed an agreement to sell Minera Michilla SA to Haldeman Mining Company SA, for $52 million.

The transaction includes the open pit mine, the underground mine, the cathode production plant and various mining properties.

Antofagasta will retain the acid terminal and other facilities located at Caleta Michilla, which are currently used by its Centinela and Antucoya mining operations.

01/12/16 - Exane BNP Paribas today reaffirms its underperform investment rating on Antofagasta PLC (LON:ANTO) and set its price target at 600p.

07/12/16 - Credit Suisse today reaffirms its underperform investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 530p (from 450p).

Barclays Capital today (09/01/17) reaffirms its equal weight investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 650p (from 510p)

Peel Hunt today (11/01/17) reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 675p (from 580p)

StockMarketWire.com
Mining giant Antofagasta has agreed to exit the Alto Maipo hydroelectric project in Chile.

Antofagasta's subsidiary Minera Los Pelambres has been reviewing its options over its 40% investment in the project since October following the announcement of a forecast 10-20% total cost overrun.

Antofagasta said that yesterday (19 January) the project's controlling shareholder, AES Gener SA announced an update on the progress of negotiations between itself, Los Pelambres and lenders, which have reached an advanced stage, subject to final approval by the lenders.

Los Pelambres has agreed to transfer its 40% interest in Alto Maipo to Gener and the electricity price applicable to the power purchase agreement with Alto Maipo is reduced.

Antofagasta chief executive Ivan Arriagada said: "Mining is our core business. We entered into this project when electricity supply in the central region of Chile was constrained to ensure that Los Pelambres would be able to access a reliable source of electricity at competitive prices.

"We are now close to fulfilling this objective at an improved price, and to ensure a clean, stable and long-term energy supply for Los Pelambres."

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 800p (from 675p).

StockMarketWire.com
Antofagasta's EBITDA for 2016 rose to $1,626.1 million - 78.7% higher than the previous year - as operating costs, before exceptional items, fell by 8.1% and revenue increased by 12.3%.

Operating cash flow generation of $1,457.3 million, up 69.8% on a year ago on the back of stronger margins and higher production.

Capital expenditure was down by 24.2% to $795.1 million as the Antucoya project and Centinela expansion were completed during the year.

The group reported operating cost reduction of $242 million, of which $176 million was achieved under the 'cost and competitiveness' programme which reduced mine site costs by 11c/lb.

Exceptional items during the year totalled $386.4 million after tax, which included the previously announced write off of the group's interest in Alto Maipo, and an impairment charge against Antucoya.

Chief executive Ivan Arriagada said: "2016 has been a year of operational delivery for Antofagasta putting us on a stronger and larger production base from which to grow.

"The successful integration of Zaldavar and the ramp-up of Antucoya - alongside the completion of the expansion of Centinela Concentrates - have contributed to a 12.5% rise in copper production to 709,400 tonnes.

"But volume increases are not the whole story at Antofagasta. We are focused on growth through profitable tonnes.

A combination of measures to boost productivity, improve efficiencies and reduce costs has led to sustainable mine site cost reductions of $176 million in 2016.

"This performance helped cash flow from operations increase by 70% to $1.5 billion during the year whilst our EBITDA margins improved from 28% to 45%.

"In the medium term we expect to see a steady shift from a copper market in balance to a slight deficit, leading to further improvement in prices.

"The Board has decided that in view of the Company's improved performance and the more positive outlook to declare a final dividend of 15.3 cents per share, bringing the dividend for the full year to 18.4 cents per share, which represents 53% of underlying earnings per share, significantly more than the company's commitment to pay-out a minimum of 35%.

"Antofagasta's cautious approach has served us well in what is a cyclical industry, providing us with a stable operating base and a strong balance sheet.

"As a company we were founded with an entrepreneurial spirit, one that looks for opportunities where others do not see them and it is this attitude - combined with a continued commitment to capital discipline - that informs our outlook.

"Consequently, our focus in 2017 is on developing those projects that offer all our stakeholders the best returns - such as the incremental expansion at Los Pelambres, which we expect to approve by the end of the year - and will underpin the continued success of Antofagasta."

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 865p (from 800p).

Berenberg today (22/03/17) reaffirms its sell investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 650p (from 515p).

Jefferies International today (23/03/17) reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 800p (from 700p).

HSBC today (18/04/17) reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 760p (from 750p).

Peel Hunt today (24/04/17) reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 875p (from 865p).

StockMarketWire.com
Antofagasta's copper production increased to 171,900 tonnes in the first quarter - 9.4% up on a year ago - driven by higher output at Centinela, and Antucoya operating at full production.

Compared with the previous quarter, copper production fell by 16.4% due to expected lower grades at Los Pelambres and Centinela concentrates.

Gold production was 53,300 ounces in Q1 2017, 6.0% lower than in Q1 2016 and 41.5% lower than in the previous quarter as grades declined at Centinela.

Molybdenum production at Los Pelambres increased by 29.4% compared to the same period in 2016 as grades increased and by 10.0% compared with the previous quarter as recoveries improved.

Chief executive Ivan Arriagada said: "We have started the year with a continued focus on cost efficiency and productivity improvements.

"Production is in line with our expectations and is some 9% higher than in the same quarter of last year.

"When compared with the last quarter of 2016 the lower production reflects the expected grade decline at Los Pelambres and Centinela.

"Cash costs before by-product credits were 8% lower compared with the same quarter last year as we continue to progress our cost improvement measures.

"We reassert our guidance for the year of 685-720,000 tonnes of copper at a cash cost before by-product credits of $1.55/lb and a net cash cost of $1.30/lb."

Liberum Capital today reaffirms its sell investment rating on Antofagasta PLC (LON:ANTO) and set its price target at 400p.

Deutsche Bank today (19/05/17) downgrades its investment rating on Antofagasta PLC (LON:ANTO) to sell (from hold) and cut its price target to 700p (from 800p).

StockMarketWire.com
Antofagasta's group copper production for the first six months of the year rose to 346,300 tonnes - 7.1% up on a year ago.

This was primarily due to higher production at Centinela and Antucoya.

Gold production during the second quarter increased by 10.5% to 58,900 ounces and for the first six months by 2.5% due to improving grades at Centinela.

Molybdenum production at Los Pelambres increased in Q2 to 2,400 tonnes and for the year to date was 36.4% higher than in the corresponding period last year at 4,500 tonnes principally due to higher molybdenum grades.

Chief executive Ivan Arriagada said: "Our copper production performance during the year so far has been stronger than in the same period last year, especially at Centinela and Antucoya, which is now operating at full capacity.

"We have continued our strategy of focusing on improving efficiencies and achieving savings. This has resulted in a net cash cost of $1.20/lb for the second quarter of 2017, down more than 5% on the previous quarter.

"Production and costs remain in-line with our expectations and our guidance for the year is unchanged."

StockMarketWire.com
Antofagasta had a strong first half with revenues up 41.9% at $2,049m, as realised copper prices increased by 25.3% and sales volumes rose by 14.3% and EBITDA increased 87.8% to $1,079.8m.

The EBITDA margin rose from 39.8% in the first half of 2016 to 52.7%, the highest half year margin reported by the group since 2012.

Operating cost reductions of $44m were achieved, as part of the 'costs and competitiveness' programme, contributing to savings of $0.06/lb in cash costs during the current period

The board has declared an interim ordinary dividend of 10.3 cents per share, which represents a pay-out ratio of 35%, consistent with the group's dividend policy.

Chief executive Ivan Arriagada said: "Antofagasta has had a strong first half year, with EBITDA up 88% versus HY 2016.

"Our performance benefited from increases in the copper price, higher sales volumes and tight cost management. As a result, EBITDA margins have returned to over 50% and cash flow from operations is up 48% to $1.1 billion.

"This better performance means the Company's interim dividend has significantly increased compared to last year to 10.3 cents per share with the Company's policy of paying out a minimum of 35% of underlying net earnings unchanged.

"Antofagasta's strategy remains focused on producing profitable tonnes through reducing costs, making improvements in productivity and efficiency and the application of innovative solutions.

"A disciplined approach to capital allocation underpins our decision-making process. Projects and future developments must compete internally for capital with any excess cash distributed to shareholders.

"The Company is well positioned for future growth, generating strong cash flows and improving returns against a background of a recovery in copper demand. The outlook for Antofagasta is positive - we have the assets, capabilities and strategy to continue to create long-term value for all of our stakeholders."

HSBC today reaffirms its reduce investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 730p (from 720p).

JP Morgan Cazenove today reaffirms its underweight investment rating on Antofagasta PLC (LON:ANTO) and cut its price target to 670p (from 740p).

Citigroup today reaffirms its buy investment rating on Antofagasta PLC (LON:ANTO) and set its price target at 1100p.

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 1010p (from 1000p).

StockMarketWire.com
Antofagasta reported copper production in the fourth quarter of 2017 fell 1.3% to 177,800 tonnes compared to the previous quarter.

Higher production at Los Pelambres and the ramp-up of the Encuentro Oxides project offset lower production at Centinela Concentrates.

The slowdown in copper production in Q4 - versus the previous quarter - weighed on full year output.

Group copper production for the full year was 704,300 tonnes, in line with guidance but 0.7% lower than in 2016.

This was due to the impact of the expected lower grades at Los Pelambres and Centinela, which was offset by Encuentro Oxides coming into production in October and following the completion of the ramp-up at Antucoya in 2016.

Gold production was 40,500 ounces in Q4 2017, a 32.0% decrease on Q3 2017. For the full year production was 212,400 ounces, 21.6% lower than in 2016, reflecting lower grades and recoveries at Centinela.

Molybdenum production at Los Pelambres was 3,300 tonnes in Q4 2017. While output for the full year rose 47.9% on higher grades to 10,500 compared to the previous year.

Net cash costs were $1.36/lb in Q4 2017, a 15.3% increase compared with the previous quarter. This was primarily due to higher cash costs before by-products credits and the lower gold grade at Centinela and lower by-product revenue.

Group production in 2018 is expected to be in the range of 705,000 to 740,000 tonnes of copper, 190,000 to 210,000 ounces of gold and 11,500 to 12,500 tonnes of molybdenum.

Chief executive Ivan Arriagada said: 'Antofagasta had a strong year operationally. Copper production at 704,300 tonnes was in line with guidance and came in at a net cash cost of $1.25/lb.

'The new additions to our portfolio at Zaldivar, Antucoya and Encuentro Oxides now account for 25% of Group production, helping offset declines at our mature assets and providing Antofagasta with a platform for growth as copper prices recover,' Arriagada said.

JP Morgan Cazenove today reaffirms its underweight investment rating on Antofagasta PLC (LON:ANTO) and cut its price target to 660p (from 700p).

Citigroup today reaffirms its buy investment rating on Antofagasta PLC (LON:ANTO) and set its price target at 1130p.

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and cut its price target to 950p (from 1050p)

StockMarketWire.com
Antofagasta reported EBITDA (earnings) jumped 59.1% to $2.59bn last year buoyed by rising copper prices and sales which helped offset lower gold revenue.

A final dividend of 40.6 cents per share was declared, bringing the total dividend for the year to 50.9 cents per share, a 177% increase compared to 2016 .

Revenues increased 31.1% to $4.75bn, while operating costs, before exceptional items, rose by $218.9m to $2.32bn driven by increased costs at the mining division.

Copper production decreased by 0.7% to 704,300 tonnes while copper sales rose 1.5%, compared to 2016. The fall in production was weighed by lower grades at Los Pelambres and Centinela.

The LME copper price of $2.51 per pound at the beginning of 2017 rose to $3.27 per pound by year-end, averaging $2.80 per pound over the whole year, an increase of 27% compared to the previous year.

Gold production fell 21.6% to 212,400 ounces while gold sales slipped 19.6% compared to 2016. The fall in production came amid lower grades at Los Pelambres and a shift to higher copper content ores at Centinela. Molybdenum production, however, was boosted by 47.9% year on year by higher grades.

Group production in 2018 is expected to between 705,000 and 740,000 tonnes of copper, 190,000 to 210,000 ounces of gold and 11,500 to 12,500 tonnes of molybdenum.

Copper production is expected to grow quarter-by-quarter through the year as grades improve, with approximately 45% of the year's production expected in the first half of the year.

The miner reported operating cash flow generation of $2.5bn, up 71.2% from 2016 on the back of stronger margins and higher sales.

Capital expenditure was up by 13.1% to $899 million amid increased capitalised stripping costs at Centinela and Antucoya, and higher sustaining capital expenditure. Chief executive Ivan Arriagada said: 'We have continued to invest through the cycle while maintaining our focus on cost discipline and operating performance. As a result, as copper prices rose in 2017 Antofagasta had another successful year completing the development of Encuentro Oxides, meeting our safety target of zero fatalities and achieving both our production and cost guidance.' 'EBITDA increased by 59% to $2.6 billion with operating cash flow rising to $2.5 billion. Testament to the improved copper market and our continuing cost management programme, our EBITDA margin rose to 54% - the highest level since 2012 when the copper price was 30% higher. As a result of this performance the Board has recommended a final dividend of 40.6 cents per share which, combined with the interim dividend, brings the total dividend for the year to 50.9 cents per share, an increase of 177% on 2016, and represents a cash payout of 67% of earnings.' 'Our priorities for 2018 are continued capital discipline and the next phase of our growth - notably the review and expected approval of the Los Pelambres Incremental Expansion project and progressing expansion plans at Centinela.

Peel Hunt today reaffirms its hold investment rating on Antofagasta PLC (LON:ANTO) and raised its price target to 980p (from 950p).

Deutsche Bank today upgrades its investment rating on Antofagasta PLC (LON:ANTO) to hold (from sell) and raised its price target to 1000p (from 900p).

StockMarketWire.com
Antofagasta copper and gold production fell in the first quarter of the year compared to a year ago, while Molybdenum production rose. The miner maintained its full year production guidance.

Copper production in Q1 2018 decreased by 10.5% to 153,800 tonnes compared with the same quarter in 2017 mainly due to the anticipated lower grades.

Gold production was 32,300 ounces in Q1 2018, 39.4% lower than in Q1 2017 and 20.4% lower than in the previous quarter as grades were down at Centinela.

Molybdenum production increased by 40.9% compared to the same period in 2017 due to better grades and recoveries.

'As planned and in line with budget the year has started with lower grades at our operations,' the firm said.

Net cash costs increase to $1.54 per pound compared to $1.27 per pound in Q1 2017. Net cash costs guidance, however, remained unchanged at $1.35 per pound. The increase in cash costs during the quarter comes as Los Pelambres successfully completed labour negotiations with the plant union and in March with the mine union.

The one-off signing bonuses related to these three-year agreements increased Los Pelambres' cash costs by 8c per pound and group cash costs by 4c per pound for the quarter, equivalent to 2c per pound and 1c per pound on an annual basis.

Guidance for the year remained unchanged as group copper production for the full year is expected to be 705,000 tonnes to 740,000 tonnes.

Production is expected to increase quarter-by-quarter during the year as grades improve at the operations to achieve guided grades for the full year, the firm said