Antofagasta shares fell 6% to 3,354p on Thursday after the Chilean copper miner's quarterly production update disappointed analysts and its 2027 output guidance came in below expectations.
The selloff spread across the mining sector, with Rio Tinto and Anglo American each falling around 4% as investors sold out of copper-heavy diversified miners on the back of the update.
Peel Hunt, which has a hold recommendation and a price target of 3,610p, said the quarter was slightly softer than it had anticipated across both production and costs.
The broker had forecast output of 158,000 tonnes of copper in the quarter, against the 152,000 tonnes actually delivered, with net cash costs also coming in higher than expected at $1.35 per pound versus its $1.26 estimate.
At Los Pelambres, the shortfall reflected lower volumes of ore mined and processed, suggesting the severe weather event in July had a longer recovery tail than Peel Hunt had assumed.
At the Centinela concentrator, ore grades dipped where the broker had expected a modest improvement on the second quarter, while a larger-than-anticipated wage signing bonus added further pressure to costs.
Looking ahead, Peel Hunt said Antofagasta's 2027 copper production guidance of 630,000 to 690,000 tonnes implies a smaller recovery in output than its existing forecast of 710,000 tonnes.
The broker flagged rising labour relations risk as a further concern, with three wage agreements due for negotiation in 2027, two at Los Pelambres and one at Centinela, against a backdrop of what it described as increased militancy in current negotiations.
Peel Hunt also noted that its full-year 2026 production forecast of 642,000 tonnes sits towards the top end of company guidance and would require a strong fourth quarter, particularly at Los Pelambres.
