Antofagasta

Company Update:
A strike at Antofagasta's Centinela copper mine in Chile began on Wednesday, 7 October, following the breakdown of government-mediated wage negotiations. The unions are now warning that November output could fall by as much as 50%, directly contradicting management's reassuring statements (Antofagasta didn't adjust its copper production estimates). 

A strike risk at Centinela (accounting for >30% of annual copper production) is likely to complicate Antofagasta’s issues – which is already battling output and cost headwinds flagged in recent months. In effect, the bane of high copper prices is higher costs – especially for labor (which also tends to be sticky). Hence, our SELL on the Chilean miner is reiterated. But this could be an opportunity for better-priced (in multiple terms) copper plays like Glencore, who also garner ample cushion from other areas/commodities (like trading, zinc and coal).

Expert Opinion:
Centinela produced approximately 240kt of copper in 2025, equivalent to an average of 20kt per month. If production is cut by 50%M (unions' assumption) this is a direct hit of 10kt per month or c USD120m at group level per month (out of a pre tax profit of cUSD3.5bn). In all, a clear negative for Antofagasta and a positive for the other players, notably Glencore and Boliden. 


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