Antofagasta Shares Edged Higher on Centinela’s Second Project

The Antofagasta plc (LON: ANTO) share price edged 1.53% higher after announcing the greenlighting of its Centinela Second Concentrator Project in Chile following a thorough evaluation. The initiation of critical path works is set to commence promptly, with the full-scale construction phase anticipated to kick off after the finalisation of definitive project finance documents. 

The Centinela Second Concentrator is designed to yield an additional 170,000 copper equivalent tonnes annually. This includes 144,000 tonnes of copper, 130,000 ounces of gold, and 3,500 tonnes of molybdenum. The project, benefiting from Centinela's vast two billion tonnes ore reserve, is expected to have a mine life of 36 years.

Centinela is set to transition into the first quartile of C1 production costs. This shift is attributed to the enhanced concentrator capacity that leverages modern technologies, increased by-product output, and improved scale economies. Centinela district's net cash costs post-expansion are projected to be among the industry's lowest.

The project's investment is estimated at $4.4 billion. This includes a new 95ktpd concentrator plant with energy-efficient high-pressure grinding rolls (HPGRs), expansion of the existing raw seawater pumping and transport system, a new tailings storage facility, and enhancements in energy and input supply infrastructure. 

The project's financing strategy involves a mix of direct contributions from Centinela's shareholders (Antofagasta plc and Marubeni Corporation) covering around 40% of the total, complemented by project finance from lenders.

Antofagasta's CEO, Iván Arriagada, said: “The Centinela Second Concentrator Project is a key element of our profitable growth strategy as it will add a further 170,000 copper equivalent tonnes per year of production¹, with the first copper expected in 2027, significantly progressing us towards our long-term ambition of 900,000 tonnes of profitable copper production. Importantly, it will also reduce net cash costs and unlock significant value in the Centinela District's two billion tonne ore reserve. This brownfield expansion project is expected to deliver attractive returns in excess of our cost of capital at a wide range of commodity prices. We are leveraging more than 20 years of operational experience and understanding of Centinela's ores, utilising existing infrastructure and building on long-established relationships within our local communities.”

Antofagasta share price. 

The Antofagasta share price edged 1.53% higher to trade at 1709.25p from Tuesday’s closing price of 1683.50p.