Antofagasta Profit Rockets 52% as Record Copper Prices Offset Weaker Output

Why It Matters

The profit jump underscores copper’s pricing power, while higher debt and a lower dividend raise questions about Antofagasta’s financial flexibility and shareholder returns.

Key Takeaways

• Core profit up 52% to $5.2bn
• Capital spending rose to $3.7bn
• Net debt increased 69% to $2.75bn
• Final dividend 48c below consensus
• Centinela expansion 70% complete, full capacity 2029

Pulse Analysis

Antofagasta’s earnings surge reflects the broader copper supercycle that has been fueled by supply constraints and strong demand from renewable‑energy and electric‑vehicle sectors. While the company’s EBITDA hit a record $5.2 bn, the underlying driver was the more than 40% jump in benchmark copper prices, not operational improvements. Investors should view this performance as a price‑driven windfall that may not be fully repeatable if commodity markets stabilize, making the firm’s capital allocation decisions critical for sustaining growth.

The firm’s aggressive capex plan, highlighted by the $3.7 bn spend on the Centinela second concentrator, signals a long‑term bet on expanding processing capacity to meet projected demand. Completion of the project by 2027 and ramp‑up to full capacity in 2029 will add 95,000 tonnes of annual throughput, potentially boosting output once the new facility is online. However, the rise in net debt to $2.75 bn—a 69% year‑on‑year increase—raises leverage concerns, especially as the final dividend of 48 cents per share fell short of market expectations, prompting a modest share price decline.

Strategically, Antofagasta is positioning itself amid shifting political landscapes. The incoming Chilean administration’s promise to ease permitting and lower corporate taxes could improve the operating environment, while the CEO’s optimism about the Twin Metals project in Minnesota suggests diversification beyond copper into nickel and platinum‑group metals. These developments may offset some of the financial pressures from higher debt and provide new growth avenues, making Antofagasta a watch‑list stock for investors seeking exposure to the evolving base‑metal sector.

Antofagasta profit rockets 52% as record copper prices offset weaker output

By Agency Staff

Chilean miner Antofagasta posted a 52% jump in annual core profit on Tuesday as record copper prices offset slightly weaker output, and said its increased capital spending will support production in the medium term.

Earnings before interest, taxes, depreciation and amortisation for 2025 leapt to a record $5.2 bn (R83.4 bn) from $3.43 bn a year earlier, in line with analyst expectations as benchmark copper prices surged more than 40% last year.

Antofagasta’s proposed final dividend for 2025 was 48 US cents a share, taking its full‑year dividend to 64.6 c a share and representing a pay‑out ratio of 50% of underlying earnings. It has kept its policy of returning at least 35% of net earnings to shareholders for more than a decade.

Capital expenditure rose to $3.7 bn last year, exceeding the $3.6 bn forecast as works at its Centinela concentrator peaked. Capex is seen at $3.4 bn in 2026.

Net debt rose to $2.75 bn at end‑2025, up 69% from a year earlier.

London‑listed Antofagasta’s shares sank 3.1% in mid‑morning trading, the top loser on London’s FTSE 100 index, which was up 0.4%. The stock has gained almost 11% this year.

Peel Hunt noted that a final 2025 dividend of 48 c a share was below analysts’ consensus and the brokerage’s estimate of 56.5 c.

Raising the bar

Antofagasta, which operates four mines in Chile, has long pursued expanding Centinela to meet rising copper demand.

“I think that the progress that we’ve completed by the end of last year is about 70% of construction already at the Centinela second concentrator,” CEO Ivan Arriagada said on an earnings call.

Antofagasta CEO Ivan Arriagada. (Pablo Sanhueza/Reuters)

He later told analysts construction is set to finish in 2027, with production ramping up in 2028 and the first year at full capacity coming in 2029. The unit has an annual processing capacity of 95,000 tonnes.

Arriagada said Antofagasta views Chile’s change of government positively, noting that President‑elect Jose Antonio Kast plans to ease permitting and to lower corporate taxes.

The CEO was upbeat on prospects for Antofagasta’s Twin Metals copper, nickel and platinum‑group‑metals (PGM) project in Minnesota, which has been delayed by a mining ban.

“With the changing landscape and policy environment in the US, we do expect that we will be able to make some progress in Twin Metals in the near term,” Arriagada said.