- Antofagasta share price sits near all-time highs as copper price soars
- Industrial metal’s price reached a new peak in January
- Miner ends run of three straight dividend cuts with a big increase for 2025
- Capex expected to have peaked in 2025 after heavy investment programme
"‘Doctor Copper’ gets its nickname because the industrial metal’s many uses mean it can be a good guide to global economic health, so it is encouraging to see both the commodity and the share price of major producer Antofagasta start 2026 on such a strong upward trend,” says AJ Bell investment director Russ Mould.
“A weaker dollar, and investors’ search for ‘real’ assets as a potential store of value, in the so-called ‘debasement trade’, are helping copper, too, and while Antofagasta has no control over that narrative, a peak in capex and expected increases in output could boost profits, cash flow and dividends in 2026.
“Copper is malleable, conductive and ductile, so it is used in everything from kettles to cars and plumbing and wiring to industrial machinery. As such it is a vital and widely used material, and one where Chile, Antofagasta’s home, produces nearly a quarter of the world’s needs.
“The copper price slid in summer 2024, amid worries about China in particular, as the world’s second-biggest economy grappled with a real estate bust and a slowdown in growth. But interest rate cuts worldwide, and the application of fiscal and monetary stimulus by Beijing to try and boost growth, helped the industrial metal to rebuild price momentum in 2025 and early 2026. Again, a weaker dollar has played a role here, too.
“The copper price is now more than a third higher than it was a year ago and Antofagasta sold its output for an average 18% more in 2025 than it did in 2024.
Source: LSEG Refinitiv data
“Add higher prices to a big decrease in net output costs (thanks in part to the benefits of higher volumes of molybdenum and gold as by-products) and Antofagasta was able to show much higher profits in 2025, based upon management’s preferred metric of earnings before interest, taxes, depreciation and amortisation (EBITDA).
Source: Company accounts.*2026E based on mid-point of management guidance given in January and reaffirmed in February.
“Output in 2026 is expected to come in between 650,000 and 700,000 tonnes of copper, compared to 653,700 in 2025, and net cash costs are expected to rise only modestly at the mid-point of the guided range of between $1.15 and $1.35 a pound, compared to $1.19 in the year just ended.
“Analysts believe the combination of higher output and lower production costs will lead to higher profits in 2026, although the copper price’s trajectory for the rest of the year will have a huge say in how accurate that forecast proves to be.
Source: Company accounts, Marketscreener, consensus analysts' forecasts
“Antofagasta is also laying the foundations for further output growth. Capital expenditure rose sharply to $3.7 billion in 2025 from $2.4 billion in 2024 thanks to construction work at the Centinela and Los Pelambres mines in Chile.
“That spending figure is the highest in at least two decades and capex as a percentage of sales has only ever exceeded 2025’s mark of 43% once in that time span.
Source: Company accounts, Marketscreener, consensus analysts' forecasts, management guidance for capex in 2026E
“That was back in 2009, when copper prices rebounded sharply in the wake of the Great Financial Crisis, only to peak in 2011 amid an onrush of fresh capacity.
“The risk is that this output increase means growth in supply outpaces growth in demand and leads to another downturn in copper prices, but, for the moment, consensus forecasts see a big jump in earnings in 2026 and 2027 and further improvement in Antofagasta’s dividend, too.
Source: Company accounts, Marketscreener, consensus analysts' forecasts.
“Antofagasta’s share price seems unmoved by this robust outlook, perhaps as a result of how it has more than doubled in the past year. That huge gain means the stock does not look particularly cheap when compared to its global copper producing peers who are listed in London, New York, Sydney, Toronto or Stockholm, on the basis of dividend yield, forecast earnings or tangible net asset value per share, though there is always the chance that all boats will rise on the tide if the copper price keeps going higher and higher.”
Source: Company accounts, Marketscreener, consensus analysts’ forecasts, LSEG Refinitiv data
