Shares in Antofagasta (LON: AAL) fell more than 6% on Thursday after the Chilean copper miner forecast weaker-than-expected production in 2027 and raised its cost guidance amid higher diesel prices.
The London-listed company expects to produce between 630,000 and 690,000 tonnes of copper next year, below its original forecast of 650,000 to 700,000 tonnes. The outlook also fell short of BMO Capital Markets’ estimate of 703,000 tonnes.
The guidance “implies no growth on the original guidance for 2026,” RBC analysts Ben Davis and David Monus wrote in a note to clients, despite improving grades at Los Pelambres and the anticipated commissioning of an expansion at Centinela.
The subdued forecast raises questions about how quickly Antofagasta’s multibillion-dollar expansion program can translate into higher output. Investors had been looking for a production boost as the company advances major projects at two of its flagship Chilean operations.
Production pressures
BMO analyst Alexander Pearce said the midpoint of Antofagasta’s 2027 guidance was 9% below the bank’s forecast, although it still implied roughly 5% year-over-year growth against BMO’s 2026 estimate. He suggested the weaker outlook could partly reflect lingering effects from weather-related disruptions this year.
In August, Antofagasta cut its 2026 production guidance to between 625,000 and 655,000 tonnes from 650,000–700,000 tonnes previously estimated after heavy rainfall and power outages temporarily halted operations at Los Pelambres in July.
The company also increased its full-year cash cost guidance before byproduct credits to between $2.60 and $2.70 per pound, up from $2.40 to $2.60, citing higher global diesel prices.
Antofagasta’s Centinela strike adds copper supply risk
Pearce said the increase could signal broader cost pressures across the mining industry, particularly as the International Energy Agency has warned that diesel market pressures could persist into 2027.
J.P. Morgan analysts said the production forecast could prompt mid-single-digit percentage downgrades to consensus earnings before interest, taxes, depreciation and amortization (EBITDA) for 2027.
Antofagasta shares were down 6.4% at £33.40 apiece in Thursday trading, giving the company a market capitalization of nearly £33 billion ($44 billion).
Despite the disappointing outlook, Antofagasta reported third-quarter copper production of 151,900 tonnes, up 7% from the previous quarter, driven by higher output at Los Pelambres.
Pearce said the result was broadly in line with BMO’s expectations, reflecting the release of concentrate previously held back during second-quarter pipeline maintenance.
Expansion progress
Antofagasta said its major growth projects at Centinela and Los Pelambres remain on schedule to complete construction and commissioning activities in 2027.
“Construction activities across our major growth projects at Centinela and Los Pelambres are progressing well, and we have entered the final phases of each schedule, ahead of construction and commissioning activities completing in 2027,” CEO Iván Arriagada said.
Chile copper supply under pressure as disruptions mount
“These projects will deliver significant growth and strengthen the resilience of our portfolio, and we remain focused on completing each project in line with expectations.”
At the Centinela Second Concentrator Project, the company began operating the primary crusher and overland conveyor during pre-commissioning tests in the third quarter. The conveyor reached its designed operating speed, while integrated no-load testing was completed across key parts of the material-handling system.
At Los Pelambres, construction advanced on the new concentrate pipeline, including tunnel works, installation and testing. Initial hydraulic tests began along the lower section, while preparations continued for hydrostatic testing on the upper section.
Pre-commissioning also progressed at the desalination plant expansion, alongside electrical cabling installation and equipment work at the pumping station.
At the Zaldívar Water Supply project, crews continued building construction camps, received key pipeline materials and began initial civil works for the high-voltage transmission line.
With commissioning approaching, analysts agreed that Antofagasta’s next challenge will be converting construction progress into sustained production growth while containing costs that are already weighing on its outlook.