Antofagasta: highly prized but highly priced

Analysts divided over Chilean mining giant’s share price.

LONDON: Shares of Antofagasta, the Chilean mining giant expected to receive approval from the government for the $3.3 billion joint venture Reko Diq copper-gold project in Balochistan by the end of this year, have surged almost 30 per cent this year.

The London-listed company’s earnings per share almost doubled in first-half of 2010 and will see its new Chilean mine Esperanza start production in the second half of November.

According to Thomson Reuters Starmine, seven of 27 analysts covering Antofagasta have a “buy” rating on the stock but eight are advising investors to “sell”. Though the potential for copper remains robust, there are cheaper stocks with which to hitch a ride on the metal’s coat tails.

“Right now, even when the world is facing a lot of difficulties in increasing copper capacity, its (Antofagasta’s) ability to come up with new capacity when copper prices are peaking is phenomenal,” said New York-based Santander analyst Victoria Santaella.

Published in The Express Tribune, October 22^nd, 2010.