When asked about the possibility of future asset purchases, Hernandez said the company would prefer to remain in the Americas. Copper prices, down more than 50 percent from an early-2011 peak, are unlikely to recover significantly for the next two to three years, he said. As that happens, more miners may be forced to put up assets for sale.

“Mining companies don’t want to dispose of their copper assets,” Hernandez said. “We haven’t seen too many opportunities on the market. On the other hand, many companies are very stressed financially, and we don’t know what will happen.”

 

Eoin Treacy's view

Copper has been trending consistently lower since 2011 so we know a lot of bad news is already in the price. It has stabilised near $2 over the last couple of months in what has so far been a relatively gradual process of mean reversion. It is going to have to sustain a move back above the 200-day MA to confirm more than temporary support has been found. 

With prices at less than 50% of where they were in 2011, higher cost producers are under severe stress. It is understandable that companies like Antofagasta see this as an opportunity to increase their stake in promising assets when the opportunity eventually presents itself. Considering how wide high yield spreads are right now they might not have to wait long because some highly leveraged companies will have problems refinancing at the rates currently on offer. 

Antofagasta’s London listing represents a high beta play on the copper price and has already unwound its oversold condition relative to the trend mean. It will need to find support above January low 340p on the first significant pullback and sustain a move above 500p on a subsequent rebound to conform more than a temporary low has been found.