Antofagasta buying powder

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Antofagasta buying powder

Private Chilean copper producer Mantos Copper has received million dollars to finance the expansion of the sulphide concentrator at its Mantos Blancos facility, which will extend the life of the open pit mine to and reduce costs. It includes a loan of million dollars from Glencore subsidiary Altonorte. The concentrator is to be expanded from a capacity of 4,3 million tons per year to 7,3 million tons per year before the natural oxides of ore are used up in the year Mantos Blancos is located 45 km from the port city of Antofagasta in northern Chile. Image: Anglo American. It is expected that and will produce Copper, which is used in energy, batteries and construction, is one of the most desirable raw materials, and it is expected that the mining company will arouse the interest of many parties, especially in Chile, where production has declined in recent years. The Chilean mining company Mantos Copper receives million dollars. Copper mining in Mantos Blancos - Chile. Please follow and like us:. Do you have questions about our services? We will advise you by phone. Make an appointment with us and use the contact form. Institute for rare earths and metals AG. Purchase of rare earth elements Sale of rare earth elements Rating of rare earth elements Evaluation of strategic metals Evaluation of high purity metals Metal bank audits Prices for metals Prices for rare earths Prices for strategic metals Prices for high-purity metals Metal analyzes Metal Consulting Visiting address: Furrengasse 21 Lucerne Switzerland Postal address: Furrengasse 21 Post office box Lucerne 6.

Antofagasta – buy before the market reheats

Antofagasta buying powder

Now, however, we have come through a copper bull market and costs are rising. There is also a new government in Chile to consider and new macroeconomic conditions in place. But even in this changed environment, Antofagasta is a good horse to pick for the energy transition. The pipeline of new projects is also limited. This points to copper prices going up. They still operate on cash profit margins of around 50 per cent and have manageable debt levels, so a style downturn is unlikely. Metals supply is tight, given the reluctance of the majors to spend heavily on increasing output while prices are high, as has happened in the past. This means prices are likely to stay higher than in previous downturns. But dividends are also likely to start dropping after two years of record distributions. Thus a bull case relies on China quietly ripping up its zero-Covid policies and continuing heavy stimulus. A moderation of China's current approach looks increasingly likely. This month shares in miners have rallied strongly on hopes China is coming close to withdrawing rules such as daily Covid tests in cities and lockdowns for any cases, so the market is certainly optimistic. Looking beyond the next 12 months, there is more certainty in the copper space. Put simply, the world needs more copper given the demand outlook for the next decade. Permitting difficulties in the US and several South American countries have exacerbated this scenario. It is responsible for 1. A rise in copper output had been forecast for the second half of this year, through production increases at existing mines and a new Anglo American AAL asset, Quellaveco. In September, Anglo cut its guidance for Quellaveco's output from ,, tonnes to 80,, tonnes. Anglo has also seen lower production from its Chilean mines, with a fall of 30, tonnes in the September quarter alone. This was largely due to mining conditions, but Anglo also flagged drought as a continuing risk to production. The slight benefit of reduced production during drought — less supply supports higher copper prices — is easily outweighed by the risk to supply. The mine was running at half capacity at times in the second half. In the longer term, an in-construction desalination plant should help Antofagasta maintain water supplies. This will be finished next year. There are a few ways to understand this trend. The miner uses a measure called net cash costs — this is the overall cash cost of copper produced excluding capital expenditure , presented on a per-pound lb basis, minus the impact of selling by-products. These vary by mine but are mostly gold and a common alloy ingredient, molybdenum. This is not going to tip the group into a loss since the copper price remains over the marginal cost of production, but it is worth flagging that the next year or so will see profits come down. Broker Peel Hunt thinks Antofagasta's expansion plans will make the balance sheet weaker — for next year, delays in getting the desalination plant running mean the broker has cut its production forecast from , tonnes to , tonnes, and cut forecasts for earnings per share and cash profit by 10 and 11 per cent, respectively. All this spending should position Antofagasta well for leaner times: the past three years has seen significant investment into new production. The Los Pelambres expansion plan phase 1 is in its final stages and will add 60, tonnes a year of copper output. Chile is in a period of change. The latest mining tax would see tax rates on a copper mine go from a range of per cent, depending on profit levels, to per cent. A proposal that was voted down would have had a top tax rate of 68 per cent. Those discussions continue — with the company and its lobbyists likely more vocal behind closed doors than Arriagada will be publicly. True, the diversified miners have strong balance sheets, but the outlook for iron ore is not so firm. Glencore is reaping the rewards for its coal holdings but continues to highlight the strength of its energy transition-exposed portfolio, which includes copper, nickel and cobalt. It will be a leaner , but we see value for the longer term. Ideas of the Week. The Chilean copper miner faces challenges, but its established operations and growth plans mean it is poised to benefit from a forecast rise in copper demand. Tip style. Risk rating. Long Term. Bull points. Growing demand for copper should support prices Production growth on the way Established mines and permits Green shift through desalination plant and renewable power sources. Bear points. Leaner period coming as costs rise Political risk in Chile. Funds October 18, Global funds making money without US tech stocks. The Big Read October 17, Is it time to tap into National Grid? Portfolio Clinic October 18, Investment Trusts October 21, Shuttered infrastructure trusts struggle in buyers' market. News October 18, Explore Topics. More on Ideas of the Week. October 17, A fuss-free route into real estate stocks This FTSE investment trust has taken a different path to its property peers. Prepare for take-off with this travel agent This company is tapping into a lucrative part of the holiday market. October 10, Bank generous dividends with this mature manufacturer The flooring company has increased its payouts every year since Recovery beckons for this venerable City stock This storied asset manager could find fresh purpose under a new management team. More on Investment Ideas. October 21, Stocks to exploit market inefficiencies One of our newest stock screens has been able to take advantage of 'earnings drift'. Fund managers' favourite health stocks These are the stocks top fund managers are betting will deliver healthy returns. A service from the Financial Times.

Antofagasta buying powder