Investec reduces its recommendation on Antofagasta to 'sell'
Chilean-focused miner Antofagasta had its rating chopped to ‘sell’ from ‘hold’ on Thursday by Investec Securities who cited the company’s stock as “fundamentally overvalued.”
Antofagasta
2,166.00p
17:04 24/04/24
FTSE 100
8,040.38
16:34 24/04/24
FTSE 350
4,419.71
17:09 24/04/24
FTSE All-Share
4,374.06
16:44 24/04/24
Mining
10,520.27
17:09 24/04/24
The broker said that if the proposed Centinela Second Concentrator project in Chile goes ahead on the metrics suggested by Antofagasta, “we see it as both value destructive and delaying any prospect of ‘surplus’ capital developing until full-year 2018 at the earliest.”
Investec said that the latest disruptions at Los Pelambres and ongoing issues with power and water and rising taxes are starting to undermine the attraction of Chile, long viewed as one of the most attractive jurisdictions for miners.
“Locals are demanding a desalination plant before supporting any expansion and a local court ruling over the tailings dam and impact on a river is being contested,” it noted.
Investec reduces its target price on the stock to 631p from 720p.