Chilean copper producer Antofagasta delivered a strong financial performance in the first half of 2026, with pretax profit jumping 72% to around $2 billion. However, the impressive earnings were overshadowed by operational difficulties in Chile that forced the company to cut its full-year copper production guidance.
Antofagasta reported first-half EBITDA of $2.84 billion, up 27% from $2.23 billion a year earlier. Revenue rose 18% to $4.48 billion, while operating cash flow surged 53% to $2.77 billion. The company also increased its interim dividend to 30.1 cents per share, nearly double the 16.6 cents paid a year earlier.
Extreme Weather Hits Los Pelambres
The major setback came from the company’s flagship Los Pelambres mine in Chile. Extreme rainfall in July led to a temporary shutdown, with the Coquimbo Region declaring a state of catastrophe following the severe weather.
Antofagasta said repairs would be required for some pipeline platforms and water-management systems. Although major infrastructure was not significantly damaged, the disruption was sufficient for the company to lower its 2026 copper production forecast.
The company now expects to produce between 625,000 and 655,000 tonnes of copper in 2026, compared with its previous guidance of 650,000 to 700,000 tonnes.
Higher Copper Prices Cushion the Impact
The earnings performance demonstrates the powerful effect of higher commodity prices. Antofagasta benefited from stronger copper and gold prices, with realised copper prices averaging around $6.19 per pound during the first half.
Copper prices have been supported by strong demand and supply concerns, particularly as the metal becomes increasingly important for electricity networks, renewable energy, electric vehicles and wider industrial electrification.
The company also reported an 8% year-on-year reduction in first-half cash costs to $1.22 per pound. However, it expects full-year costs to rise to approximately $2.60 per pound, partly because of higher fuel prices.
Market Reaction Turns Negative
Despite the strong financial numbers, investors focused on the production downgrade. Antofagasta shares fell about 4.6% in early London trading, underperforming other resources stocks.
The market reaction illustrates a key challenge facing copper producers: record or near-record prices can boost profits, but investors remain highly sensitive to production volumes and operational reliability.
Chile’s Broader Copper Challenge
The difficulties at Antofagasta come against a wider backdrop of challenges facing Chile’s copper industry. The country remains a critical source of global copper supply, but some major producers are dealing with ageing assets, declining production and the need for substantial investment.
State-owned Codelco, for example, is also facing production and financial pressures, adding to concerns about Chile’s ability to maintain its position as a leading global copper supplier.
For Antofagasta, strong cash generation provides some protection against the production setback. Analysts cited by Reuters said the company’s solid cash-flow position could help cushion the impact of lower output.
Outlook
Antofagasta’s first-half results underline the contrasting forces currently shaping the copper industry. Higher prices are generating exceptional profits, while weather disruptions, rising costs and operational challenges threaten production growth.
As demand for copper rises with electrification and the global energy transition, maintaining reliable production will become increasingly important. For Chilean miners, the challenge will be to convert favourable commodity prices into sustained production growth while managing climate, infrastructure and cost pressures.