Citi lifts price target for Antofagasta after Centinela expansion

Citi has raised its target price for Antofagasta and reiterated an 'buy' rating after the copper miner approved a $4.4bn expansion of its Centinela mine in Chile.

The company announced in December that critical path works would begin immediately with full construction expected to commence after definitive project finance documents have been executed during the first quarter 2024. The expansion will add an average of 170,000 tonnes of copper equivalent production per annum.

"ANTO’s growth narrative, driven by volume recovery in next 6-12 months, is solidified by the approval of Centinela expansion, adding another 170kt copper production over the medium term at an attractive cost profile," said Citi in a research note on Wednesday.

"The company is on track to increase its copper production 30% by 2027 while repositioning its portfolio lower on the global cost curve."

Meanwhile, Citi said its house view remains constructive on copper prices for medium to long term.

The bank has raised our target price for the shares to 2,100p, suggesting decent upside from Wednesday's price of 1,718.5p, up 0.7% on the day.