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Antofagasta's half-year profit rises on strong copper prices

Antofagasta, which is majority owned by the Chilean Luksic family, announced it would pay its shareholders 7.9 cents per share. Last year, the interim dividend was 11.7 cents.

Shares opened 0.4 percent higher in London.

“We expect a positive reaction to today’s results,” said Marina Calero, analyst at RBC Capital Markets.

“Given Antofagasta’s high valuation and limited cash flow generation in the near term, we believe other opportunities in the European mining sector are more favorable,” added Calero.

Antofagasta said construction of a second concentrator at its Centinela mine was ahead of schedule, while expansion work had begun at its Los Pelambres desalination plant.

In July, the company announced that full-year copper production from its four copper mines in Chile would be at the lower end of its forecast range of 670,000 to 710,000 tonnes due to lower ore grades.

The London-listed company expects net cash costs of $1.70 per pound this year.

Copper, used in the energy and construction sectors, is expected to benefit from the energy transition, also due to demand from the electric vehicle industry and new applications such as data centers for artificial intelligence.

Prices for the metal reached a record high of over $11,100 per tonne on the London Metal Exchange (LME) in May before falling nearly 20 percent due to weak production activity.

(By Clara Denina; Editing by Kirsten Donovan, Jason Neely and David Evans)

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