Antofagasta buys Canada’s Duluth Metals, warns lower margins ahead as copper falls
Copper miner Antofagasta PLC (LON:ANTO) will complete this week its $85 million (Cdn$96m) acquisition of Canadian explorer Duluth Metals (TSX:DM), in a move aimed to tap into markets other than Chile.
In an interview with local financial newspaper Diario Financiero (in Spanish), Diego Hernandez, who takes over as Antofagasta's group chief executive officer next month, also warned the company may see its margins affected by the recent slump in copper prices.
The mining group, property of the Luksic family —one of Chile’s richest— does not expect the copper price fall to be sustained as that is likely to cause production cuts and a subsequent deficit, which in turn would help prices recover.
"We are prepared in case the crisis is extended and deepened," Hernandez said, adding that the company was studying "additional measures" should the market continue to deteriorate.
With Duluht’s acquisition, Antofagasta takes control of the Twin Metals project, located in north-eastern Minnesota, U.S., which may become the FTSE100-listed miner’s first operation outside its home-country.
Antofagasta is due to begin production at its northern Chile-based $1.9 billion Antucoya project this year, generating 80,000 tonnes of copper cathodes annually.