Antofagasta’s Zaldívar Mine Extension: A Greenlit Play on Copper’s Golden Age

The global energy transition is fueling a historic surge in demand for copper—a metal so critical to EVs, solar panels, and smart grids that it’s been dubbed “the new oil.” Yet, Antofagasta PLC (LON:ANTO) remains grossly undervalued despite securing a landmark regulatory win that extends its flagship Zaldívar Mine’s life to 2051. With a $2 billion NPV uplift, a seawater transition that neutralizes water scarcity risks, and a stock price trading at a 25% discount to net asset value (NAV), this is a rare opportunity to buy a de-risked, growth-oriented copper giant at a fire sale price. Act now—this is a Buy with 20% upside to £55.

Regulatory Fog Lifts: Zaldívar’s 2051 Lifeline Is a Gamechanger

The Chilean Environmental Authority’s approval of Zaldívar’s Environmental Impact Assessment (EIA) in late 2024 marks a decisive turning point for Antofagasta. This formal Environmental Qualification Resolution (RCA), finalized in early 2025, eliminates the single largest risk to the mine’s operations: regulatory uncertainty. The mine, co-owned with Barrick Gold, now has a clear path to operate until 2051, unlocking 13 years of additional production from both secondary and primary sulfide ore reserves.

The RCA’s approval also resolves a two-year permitting battle, including a legal settlement with Chile’s Consejo de Defensa del Estado (CDE) over water rights. By 2028, Zaldívar will transition from its current freshwater sources to either seawater or third-party supplies—a move that not only addresses water scarcity in Chile’s arid regions but also positions Antofagasta as an ESG leader in a sector under intense scrutiny.

Copper’s Demand Boom: Antofagasta’s Timing Couldn’t Be Better

The world is on pace to consume 40 million tonnes of copper annually by 2040, up from 24 million tonnes today, as EV adoption and renewable energy infrastructure explode. Every EV requires 83 pounds of copper, versus just 23 pounds for a gasoline car. Meanwhile, solar farms use 4.5 tonnes of copper per megawatt, and offshore wind projects require 15,000 tonnes per gigawatt.

Antofagasta is uniquely positioned to capitalize. Zaldívar’s extended mine life adds 3.5 million tonnes of copper reserves to its portfolio, with production costs set to fall as lower-grade sulfide ores are efficiently processed. CEO Iván Arriagada’s focus on operational continuity—ensuring 12 months of uninterrupted production through 2025—reduces execution risk, making cash flows far more predictable than peers’.

ESG as a Competitive Moat: Water Transition = Social License + Cost Advantage

Critics of mining in Chile’s Atacama Desert often cite water scarcity as a existential threat. Antofagasta’s seawater transition, however, transforms this liability into an asset. By 2028, the mine will:
- Eliminate reliance on local freshwater, easing community tensions.
- Use desalination technology that’s 30% cheaper than current methods, lowering unit costs.
- Secure a long-term water supply with no dependency on scarce groundwater.

This proactive stance on ESG compliance is a stark contrast to peers like Freeport-McMoRan (FCX), which faces lawsuits over water usage in Indonesia. Investors are increasingly rewarding companies that mitigate risks before they arise—Antofagasta’s ESG differentiation could unlock a valuation re-rating as ESG-conscious funds rotate into its shares.

Valuation: A 25% Discount to NAV Is a Buy Signal

Antofagasta’s stock trades at £18.50, a 25% discount to its estimated £24.70 NAV. This discount is irrational given its:
- De-risked asset base: Regulatory clarity at Zaldívar removes a key overhang.
- Low-cost production profile: Cash costs of $2.80–3.00/lb vs. industry averages of $3.50–4.00/lb.
- 2051 mine life: Peers like BHP (BHP) or Rio Tinto (RIO) lack such a clear growth runway.

The £55 price target assumes Antofagasta trades at 1.2x NAV, a modest premium to its five-year average. Even a reversion to 1.0x NAV would deliver £6.20 per share upside, while rising copper prices (now at $3.40/lb) could supercharge earnings.

Catalysts to Ignite a Re-Rating

1. Zaldívar’s RCA Formalization: The permit’s issuance by May 2025 is a “binary event”—once finalized, Antofagasta’s valuation gap to peers closes.
2. Copper Price Surge: A $4/lb price (likely by 2027) would boost EBITDA by £400 million annually.
3. ESG Recognition: The seawater transition could win Antofagasta inclusion in major ESG indices, attracting passive inflows.

Final Verdict: Buy Antofagasta at £18.50 – 20% Upside Ahead

Antofagasta’s Zaldívar Mine extension is a once-in-a-decade catalyst that erases regulatory risk, unlocks billions in value, and positions it as a leader in the copper supercycle. With a stock price depressed by sector-wide pessimism, this is a rare chance to buy a de-risked, high-margin asset at a 25% discount to its intrinsic worth.

Action Item:
- Buy ANT0 on dips below £18.50
- Target: £55 (20% upside)
- Stop Loss: Below £16.00

The energy transition isn’t waiting—neither should you.

Disclosure: This analysis is for informational purposes only and not financial advice. Always conduct your own research.