Weaker global economic growth bites twice for Antofagasta. First, it curtailed the rapid rise in copper prices that had fuelled the sharp post-pandemic rally in the FTSE 100 miner’s shares; now inflation threatens to eat into cashflows by pushing up the costs of expansion.
The budget for a mooted project to increase production at Antofagasta’s Centinela mine has risen to $3.7 billion, from an expected $2.7 billion. A decision on the project to increase production by 170,000 tonnes a year is not due until next year. If it goes ahead, it would eat into the company’s medium-term cashflows, according to analysts at RBC Capital.
Meanwhile, costs for the first phase of a plan to increase the capacity of Los Pelambres, Antofagasta’s largest mine,
