Q3 2026 Production Report

Antofagasta posts higher Q3 copper output but faces rising costs and ongoing labour unrest.

What the company is saying

Antofagasta plc reports a 7% quarter-on-quarter increase in copper production to 151,900 tonnes for Q3 2026, attributing this to inventory drawdown and operational recovery at Los Pelambres after severe weather. CEO Iván Arriagada frames the narrative around resilience, project progress, and a positive long-term copper market outlook, while acknowledging persistent inflation and supply chain challenges. The company sets 2027 copper production guidance at 630,000–690,000 tonnes, citing higher grades at Los Pelambres and lower grades at Centinela Concentrates. Construction at Centinela and Los Pelambres is described as entering final phases, with commissioning targeted for 2027. The announcement highlights over five years without a fatality and a lost-time injury frequency rate below 1.0. Labour relations are mixed: a three-year agreement was reached at Zaldívar, but two unions at Centinela (covering about 20% of the workforce) have declared a strike post-quarter, with negotiations ongoing. Non-Executive Director Juan Claro stepped down effective 31 August 2026.

What the data suggests

Q3 2026 copper production rose to 151,900 tonnes, up 7% from Q2, driven by Los Pelambres, which increased output by 17% to 79,300 tonnes. Year-to-date copper production is 436,900 tonnes, 8% lower than the prior year, mainly due to lower grades and recoveries at Centinela. Gold and molybdenum production are also down year-on-year by 5% and 21%, respectively. Q3 cash costs before by-product credits fell 7% quarter-on-quarter to $2.73/lb, but year-to-date costs are up 20% to $2.81/lb, reflecting lower production and higher consumables prices. Net cash costs in Q3 were $1.38/lb, up 1% from Q2, and $1.28/lb year-to-date, up 3% year-on-year. The company raised its 2026 cash cost guidance to $2.60–2.70/lb (from $2.40–2.60/lb), while maintaining net cash cost guidance at $1.15–1.35/lb and capex at $3.4 billion. Project progress is described but not quantified with milestone percentages. Labour unrest at Centinela and ongoing cost inflation present operational risks. The company’s safety record is strong, with no fatalities in over five years.

Analysis

The announcement provides a detailed and balanced operational update, with most claims supported by specific production and cost data for Q3 2026 and year-to-date. While there is some forward-looking language regarding 2027 production guidance and project completion, these are presented as guidance rather than promotional targets, and are grounded in current project status. The tone is measured, with no evidence of exaggerated claims or narrative inflation; phrases like 'progressing well' are not paired with unsupported superlatives. The capital expenditure guidance of $3.4 billion is reiterated, but the benefits (increased production) are not expected until 2027, indicating a near-term to long-term execution distance and a capital intensity flag. The absence of profitability metrics (net income, EBITDA, operating profit) means the true_signal cannot exceed weak_positive, as investors cannot assess whether operational growth is translating into value. Overall, the narrative is proportionate to the evidence, with no material hype.

Risk flags

• ●Cost inflation remains a significant risk, with year-to-date cash costs before by-product credits up 20% to $2.81/lb and 2026 guidance raised to $2.60–2.70/lb, driven by higher diesel and sulphuric acid prices. Sustained cost pressure could erode margins even if production volumes recover.
• ●Labour relations are a material operational risk. While a three-year agreement was reached at Zaldívar, two unions at Centinela representing about 20% of the workforce have declared a strike post-quarter, with negotiations ongoing. Prolonged industrial action could disrupt production and further increase costs.
• ●Production volumes are under pressure, with year-to-date copper output down 8% and gold and molybdenum also declining. Lower grades and recoveries at Centinela are the main drivers, and any further deterioration could impact the ability to meet guidance.
• ●Project execution risk is present as major growth projects at Centinela and Los Pelambres approach commissioning in 2027. Delays or cost overruns in these final phases could affect both timing and capital intensity, especially given the $3.4 billion capex guidance.
• ●Disclosure does not include profitability metrics such as net income or EBITDA, limiting visibility into whether operational improvements are translating into financial value for shareholders.

Bottom line

Antofagasta’s Q3 2026 update shows a short-term rebound in copper output, but year-to-date production remains below last year and cost pressures are intensifying. The company has raised its 2026 cash cost guidance, reflecting persistent inflation in key inputs, while maintaining production and capex targets. Labour unrest at Centinela and ongoing negotiations introduce near-term operational uncertainty. Major project completions at Centinela and Los Pelambres are on track for 2027, so material volume and cost improvements are not imminent. The safety record is strong, but investors lack visibility on profitability due to the absence of earnings or cash flow data. The most important takeaway is that while operational execution is improving in some areas, cost inflation and labour risk threaten near-term performance, and the payoff from current capital investment will not be realized until at least next year.

Announcement summary

(LSE:ANTO) Antofagasta plc reported a 7% increase in quarterly copper production to 151,900 tonnes in Q3 2026, with Los Pelambres completing the drawdown of inventories accumulated during the prior quarter. The company announced 2027 copper production guidance of 630,000–690,000 tonnes, reflecting higher grades at Los Pelambres and lower grades at Centinela Concentrates. Construction activities at Centinela and Los Pelambres are progressing well, with both projects entering their final phases ahead of construction and commissioning activities completing in 2027. Group copper production year-to-date was 436,900 tonnes, 8% lower than the prior year, due to lower grades at Centinela Concentrates and lower recoveries at Centinela Cathodes. Gold production in Q3 2026 was 44,300 ounces, 4% lower than the previous quarter, and year-to-date gold production was 137,100 ounces, 5% lower year-on-year. Molybdenum production in Q3 2026 was 2,900 tonnes, 6% below the prior period, and year-to-date molybdenum production was 9,000 tonnes, 21% lower than the first nine months of 2025. Cash costs before by-product credits in Q3 2026 were $2.73/lb, a 7% decrease quarter-on-quarter, while year-to-date cash costs before by-product credits were $2.81/lb, 20% higher year-on-year. By-product credits in Q3 2026 were $1.35/lb, a 15% decrease quarter-on-quarter, and $1.53/lb year-to-date, 38% higher year-on-year. Net cash costs in Q3 2026 were $1.38/lb, 1% higher quarter-on-quarter, and $1.28/lb year-to-date, 3% higher year-on-year. The Group completed over 5 years without a fatal accident at any of its sites and projects, with the lost-time injury frequency rate remaining below 1.0. At Los Pelambres, Q3 2026 copper production rose by 17% quarter-on-quarter to 79,300 tonnes, with year-to-date production at 213,100 tonnes, 1% lower than the prior year. Molybdenum production at Los Pelambres was 2,000 tonnes in Q3 2026, 13% lower quarter-on-quarter. Gold production at Los Pelambres was 13,300 ounces in Q3 2026, a 14% increase quarter-on-quarter. Copper sales at Los Pelambres in Q3 2026 were 90,700 tonnes. Cash costs before by-product credits at Los Pelambres were $2.41/lb in Q3 2026, 7% lower than the prior quarter, and $2.53/lb year-to-date, 13% higher year-on-year. Net cash costs at Los Pelambres were $1.01/lb in Q3 2026 and $0.86/lb year-to-date. At Centinela, total copper production was 46,800 tonnes in Q3 2026, 3% below the prior quarter, and 143,900 tonnes year-to-date, 19% below the first nine months of 2025. At Centinela Concentrates, copper production in Q3 2026 was 32,300 tonnes, and year-to-date was 102,000 tonnes. At Centinela Cathodes, copper production in Q3 2026 was 14,500 tonnes, and year-to-date was 41,900 tonnes. Gold production at Centinela Concentrates was 31,000 ounces in Q3 2026. Molybdenum production at Centinela was 900 tonnes in Q3 2026. Cash costs before by-product credits at Centinela were $2.97/lb in Q3 2026 and $2.96/lb year-to-date. Net cash costs at Centinela were $0.96/lb in Q3 2026 and $0.78/lb year-to-date. Group copper production guidance for 2026 remains unchanged at 625,000–655,000 tonnes. Group-level guidance for cash costs before by-product credits has been raised to $2.60–2.70/lb, from the previous range of $2.40–2.60/lb. Net cash cost guidance remains unchanged at $1.15–1.35/lb. Capital expenditure guidance is unchanged at $3.4 billion. In Q3 2026, the Group concluded a three-year labour agreement with a workers’ union at Zaldívar. After the quarter, two workers’ unions at Centinela representing approximately 20% of the own employee workforce declared a strike, with negotiations ongoing. Non-Executive Director Juan Claro stepped down from the Board of Directors with effect from 31 August 2026.

Disagree with this article?