Antofagasta (LSE: ANTO) has cut its 2026 copper production forecast after extreme weather shut its flagship Los Pelambres mine in Chile, overshadowing a 27% increase in first-half core earnings.

The Chilean miner lowered its annual production guidance to 625,000-655,000 tonnes from 650,000-700,000 tonnes, a roughly 5% reduction at the midpoint, according to a release late Wednesday. The revision followed heavy rain and snowfall in July that forced Los Pelambres to halt operations after Chile's government declared a "state of catastrophe" in the Coquimbo Region where the mine is located.

Shares in Antofagasta fell 5.2% by late-afternoon Thursday in London to 3,818 pence, underperforming other resources stocks. The company's market value stands at almost £38 billion (US$51.3 billion).

The setback came despite stronger commodity prices lifting Antofagasta's first-half results. Pretax profit jumped 72% from a year earlier to $2 billion, while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 27% to $2.84 billion. Operating cash flow increased 53% to $2.77 billion.

"Antofagasta has delivered a slightly better-than-expected first half 2026," BMO Capital Markets mining analyst Alexander Pearce said in a note. EBITDA beat BMO's estimate by 5% on lower costs. The reduced copper production forecast "partially offsets what was otherwise a good update," Pearce said.

Prices boost

Copper prices rose 36% and gold gained 46%, helping offset lower production during the period. Copper has been supported by growing demand from electrification, including electric vehicles, renewable energy installations, and power grid buildouts, even as global mine supply has struggled to keep pace.

Antofagasta said the extreme weather did not significantly damage major infrastructure at Los Pelambres, although the company needs to repair some pipeline platforms and water-management systems.

Citi analysts said the company's "solid cash flow position" should help offset the negative impact of the production downgrade.

BMO's Pearce noted adjusted earnings of $847 million (or 86¢/share) beat the bank's estimates by 15%, primarily reflecting lower cash costs and depreciation. The company ended the half with a net debt position of about $4 billion, up from $2.8 billion at the end of 2025.

Antofagasta declared an interim dividend of 30¢ per share, 16% above BMO's 26¢ estimate and consistent with the company's 35% payout policy. Pearce said the payment implies an annualized yield of about 1.1%.

Chile challenges

Antofagasta's guidance cut adds to production concerns facing Chile's copper industry, which accounts for roughly a quarter of global supply, as companies contend with operational setbacks and aging mines while trying to maintain and expand output.

State-owned Codelco has issued a series of warnings over project development timelines and its longer-term production ambitions. It has also lowered its 2026 production guidance to about 1.34 million tonnes from roughly 1.37 million tonnes, rather than pursuing the 1.7 million-tonne target set by the previous CEO, Máximo Pacheco.

Antofagasta's immediate challenge is restoring Los Pelambres output while taking advantage of copper prices that helped deliver sharply higher earnings and cash flow in the first half. Investors will be watching the pace of the mine's restart and whether the company can recover lost volume in the second half, as tighter global copper supply has amplified the market's sensitivity to disruptions at major operations.

Antofagasta half-year results

Codelco rules out meeting copper goals as it faces tough year