Antofagasta: Weather-Trimmed Guidance, But Cost and Growth Story Intact

A Record Half, Yet a Reduced 2026 Outlook

Antofagasta reported a strong set of interim results on 13 August 2026, with EBITDA up 27% to $2.84 billion and an industry-leading EBITDA margin of 63%. The company also boosted its interim dividend by over 80% to $0.301 per share. However, the headline was a cut to full-year copper production guidance to 625–655kt, driven by an unusually severe winter storm at Los Pelambres. The CEO, Iván Arriagada, framed this as a prudent response to El Niño-related weather, noting that the storm was the most severe in the mine's history and that the guidance already factors in further adverse conditions for the rest of winter.

We think of it and you should think of it in that way. It does factor in, the fact that we still have a period to go... and therefore, that's factored into the range as we have disclosed it.

The market had already anticipated some disruption, but the degree of caution in the new range, combined with a subtle shift in language around the Centinela second concentrator (dropping the "on budget and on schedule" phrasing), has raised questions about whether the growth pipeline is slipping. Management insists the project remains on track for commissioning in 2027 and ramp-up in 2028, with “no change to that time line nor are we envisaging a change in the project cost” — Iván Herrera, Chief Executive Officer · 2026-08-13. Still, the bears are circling.

Input Cost Pressures and a Shifting Cost Curve

Beneath the weather noise lies a more structural theme: rising input costs, particularly for sulfuric acid. The company's heavy reliance on leaching makes it exposed to acid spot prices, which spiked during the first half on geopolitical tensions. However, Antofagasta has largely shielded itself through term contracts. As Iván Arriagada put it, “Our prices are based on long-term contracts, and therefore, we've not seen the same increase that you will witness in spot prices.” — Iván Herrera, Chief Executive Officer · 2026-08-13 The company believes it has secured volumes for 2027, though at prices that partially reflect the elevated spot market.

This cost pressure is a key reason why the company's net cash cost guidance was kept flat at $1.15–1.35/lb, despite a strong first-half performance that saw a 8% reduction. The CFO, Mauricio Ortiz, attributed the improvement to by-product credits and the ongoing competitiveness program. Sustaining CapEx is expected to stay in the $1–1.5 billion range, with peak development spend now behind – a point that should reassure investors about future free cash flow.

Tax Reform, Political Tailwinds, and Strategic Optionality

On the regulatory front, Chile's new government has proposed cutting the corporate tax rate from 27% to 23%. While the benefit is likely to be transitory for Antofagasta due to withholding tax top-ups, it is a positive signal for competitiveness and investment. The company also continues to hold a 19% stake in Buenaventura, with management reiterating a strategic interest in Peru. Earlier this year, they noted the importance of sticking to a disciplined capital allocation framework “as the backbone of all our financial decisions” — Mauricio Ortiz · 2026-02-17, a stance that remains unchanged.

The long-term copper story also remains intact, with demand expected to outpace supply by 4 million tonnes by 2035. As Arriagada stated, “this gap makes it clear that there will likely be a copper shortfall over the medium term of significance” — Iván Herrera, Chief Executive Officer · 2026-08-13. With a fully funded brownfield pipeline, including the Second Concentrator at Centinela and the Zaldivar water project, Antofagasta is positioning itself to capture that opportunity – even if the near-term path has become a little rockier.