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Miner Antofagasta hikes dividend as profits surge

Chilean miner Antofagasta more than tripled its interim dividend after a rally in copper prices boosted first-half earnings, lifting its shares to a four-year high. The shares jumped as much as 5.5 percent to 1,007 pence, their highest since May 2013. Antofagasta, majority-owned by Chile’s Luksic family, raised its first-half dividend to 10.3 cents per share from 3.1 cents in the same period last year. Chief Executive Officer Ivan Arriagada said any further increases would be viewed in the light of the company’s capital allocation plans, copper prices and Antofagasta’s policy of paying out 35 percent of earnings over the full year. “We do have a favourable outlook on the copper price but we are still just coming out of a downturn,” he said on a conference call. Copper on the London Metal Exchange rallied to its highest in almost three years and is up nearly 20 percent this year on expectations of tighter supply. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 88 percent to $1.1 billion for the six months to June 30, Antofagasta said in a statement. Copper production rose 7 percent to 346,300 tonnes on higher output at its Centinela and Antucoya mines. Net cash costs fell 1.6 percent to $1.24 per pound. For the full year, the copper output target was kept at 685,000-720,000 tonnes, while cost and spending estimates were also unchanged. Capital expenditure totalled $410 million in the six months to June mainly on higher mine development costs. On expansion, Arriagada said the company would focus on brownfield developments as a low-risk and high-return option. “With most of the major capex programs already completed, Antofagasta remains well placed to leverage the improved copper price environment,” said BMO Capital Markets mining analyst Edward Sterck. At 0915 GMT, Antofagasta shares were up 4.1 percent at 994 pence, the biggest rise by a European blue-chip stock and outpacing a UK mining sector up 2 percent.

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