ANFGF (ANFGF) Q2 2026 Earnings Report, Transcript and Summary

Hello, and welcome to Antofagasta's 2026 Half-Year Results Call. We will start today's session with a short introduction for Antofagasta to be followed by a question-and-answer session. [Operator Instructions] I'll now hand you over to Rob Simmons in Antofagasta's London office to introduce today's speakers.

Thank you. Good morning, good afternoon, everybody. Welcome to our half year call for 2026. We are here today with our Chief Executive, Ivan Arriagada; our CFO, Mauricio Ortiz; and our Vice President of Sustainability, Alejandra Vial. In terms of process today, Ivan will start with a short introduction, and then we'll move straight into Q&A and will aim to wrap up within 1 hour. Ivan, over to you. Iván Herrera: Thank you, Rob, and hello, everyone, and thank you for joining this year's results call. I know you will have seen this morning the release and presentation. But before I take your questions, as Rob was mentioning, I would like to say a few highlights about the results of the first half of 2026. Firstly, I would like to start with safety, as we always do. This remains our first priority and the foundation of our strategy. And I am pleased to share with you that we have now completed 5 years without a fatal or serious accident across our operations and projects. And this remains our key priority. This safety culture also guided us to the orderly response that we had to the severe weather condition that we experienced at Pelambres in July, and we will refer more to that during the call. The resumption of the operations at the mine progressed in a safe and orderly manner, and we will talk about that a bit more. Going now to the first half of the year. The first half was marked by another period of strong performance for Antofagasta with operational discipline and favorable pricing, translating into a 27% increase in EBITDA to $2.84 billion. And an industry-leading EBITDA margin of 63%, which is amongst the highest that we've ever recorded. Cash flow from operations was up also 53%. All of this enabled us to continue to deliver value to our shareholders through an interim dividend, which is consistent with our policy of 35% minimum earning distribution of $0.301 which represents an 80% or 81% increase on last year. So we've delivered according to our policy an increase of above 80% on our dividend. Now during this period, we've also seen is well-known inflationary pressures across the sector, particularly for inputs like diesel and sulphuric acid. But despite this, we've delivered a reduction in net cash cost of 8%, reflecting our cost discipline, productivity gains and our meaningful by product contributions, which is a very key element of both Centinela and Pelambres districts. As a result, our full year guidance for net cash cost remains unchanged for the year between $1.15 and $1.35 per pound. Now due to the impact of the storms last month, and in anticipation of harsher than normal winter full year Copper production is now expected to be in the range of 625,000 tonnes to 655,000 tonnes for the year. Our strong balance sheet remains a key feature of Antofagasta and we are very well placed to deliver value through our leading organic copper growth pipeline. We have this pipeline fully-funded. It's a low-risk Brownfield growth program, which is intended to deliver a 30% increase in volume once commissioning is complete in 2027. I'm pleased to report that construction and pre-commissioning activities, both at the second concentrator at Centinela and in the future growth enabling projects at Pelambres remain on track. At Zaldivar, during the period, we also approved a $900 million investment in a water pipeline to transition away from Continental water by mid-2028, securing a stable future and supporting potential life mine extension to '2051. And just to close now, let me say a few words about the market. Copper is increasingly essential to global growth driven by long-term macro trends, which we have covered in the past, electrification, grid expansion, new technologies like AI and data centers. Global copper demand is expected to grow between now and 2035 by approximately 8 million tonnes, while copper supply is expected to grow by about 4 million tonnes. So this gap makes it clear that there will likely be a copper shortfall over the medium term of significance. And we think with our industry-leading program, for Tier 1 copper mines in a premier jurisdiction, we are confident that we will and uniquely positioned to capture this long-term value opportunity. So against this good market background, in summary, we've had a good set of financial results for the first half. We remain on track for our projects and therefore, have continued to deliver our results. So with that, I'll pass back to the operator for any questions that you might have.

[Operator Instructions] Our first question comes from Jason Fairclough with Bank of America.

Look, two questions for me. The first one is on the Centinela project. Second, just on the impact of the storms. So on Centinela, I've got a couple of bears on the stock who are saying that you've quietly push this back a little bit that the ramp-up is now drifting and it's really the ramp-up is not going to start until the year after next. Is that the right way to read it? And if that's true, is there any cost impact from this? Iván Herrera: Okay. Let me address that. I think Jason, and thanks for joining the call. The Centinela second concentrator project is progressing very well in terms of its construction and there are even for some subsystems pre-commissioning activities taking place. Now we've always said that 2027 is the year in which we will complete -- fully complete the commissioning activities and commence the ramp-up -- and therefore, that is unchanged. So we are not indicating any change with respect to that. We've not been precised about the timing in which that cutoff between commissioning and ramp-up will commence. But we will be more specific as we sort of continue to advance the project and move towards completion, but it's intended that the commissioning and the ramp up both happen in 2027, I mean, the beginning of the ramp-up. So when exactly will that happen? It's something that we will share as we sort of move towards completion of the commissioning phase next year. But no, there is, from that point of view, the project is advancing well, and there is no change. And the storms, just to be clear, you mentioned the storms at the beginning. The -- I would say that the storms that we had, which are quite unique in nature have impacted primarily the central part of Chile, so not the north of Chile. So we did not see meaningful impact in Antucoya, Zaldivar or Centinela. And as I say, they were focused on the central part of Chile, and primarily, in fact, in the region where Pelambres is located amongst the central regions that were impacted where Pelambres is -- was the only one which was considered a state of catastrophe by the government considering the impact of the snow and the water in that region in elements like public road and other public infrastructure.

Just a follow-up, Ivan. So you're saying it's quite, let's say, regionalized to the Pelambres region. I know you have lots of contacts across the industry. Is there anything else that we should think about that might be coming down the pipeline that maybe people haven't fully understood in terms of the impact? And I guess, with that, do you feel like your new guidance is conservative? Or is there more downside risk? Iván Herrera: I think the way that we've looked at this is that we are sort of halfway through winter. So there's still a period of winter that needs to be completed, which could bring severe weather condition. And the key issue is that we've got the El Nino phenomenon now happening. It does not happen every year. But this year, it's been here, and it's been extremely severe. Just to put things in perspective in the region where Pelambres is and for Pelambres, in fact, this has been the more severe weather event in its history. So in the guidance that we've built, we've got essentially the ramp-up of activities. And in essence, in some places in the mine, we are continuing to do that as we sort of remove the snow and prudently ensure that the conditions which are in place are safe to operate. But we've built into the guidance as well. Contingency possibility that there is a weather condition, which continues to be adverse throughout the balance of the winter. So we think of it and you should think of it in that way. It does factor in, the fact that we still have a period to go. And we could have bad weather in that period. And therefore, that's factored into the range as we have disclosed it.

Our next question comes from Ian Rossouw with Barclays.

Thanks, everyone. Can you guys see me? Hello? Iván Herrera: No, but we can hear you well, but I can't see you.

I don't have a video button to press. But just wanted to follow up on Jason's question. Obviously, if you look at the sort of status update, you've omitted the sentence, the project remains on budget and on schedule. So -- and you give a bit more details about the additional work that's required in the flotation and concentrator area due to technical work. Can you maybe just sort of give a bit more color on that, please? And it seems like the storm issues at Pelambres was only part of the explanation for the downgrade. And I guess you've given a bit more color on your conservatism going forward. But I just wanted to get a sense of was there anything else? I guess, that's been tracking slightly below budgets in terms of grade or mine plans and how we should think about that going into 2027? If you look at the slide deck from your site visit, I think you were sort of intimating, let's say, roughly a 4%, 5% increase in production into '27 should we still expect that? Or does small delay at the Centinela concentrator basically mean production might be flat? Iván Herrera: Okay. With respect to the -- let me address first the weather event. As I said before, in the case of Pelambres, we sort of build the contingency component of the balance of the weather period that's still behind. And just to address your comment that what we've seen in essence is that recovery of the full production at the mine because we're doing it, as I said before, in a safe and prudent and orderly way, it does take a span a bit longer time. To put things in perspective, the amount of snow that we've seen in the mine is about 5 million cubic meters. So that has -- is material that needs to be removed. And so we're already doing that. So we're back into the main phases, but there are phases in the mine that we still have to fully clear. And therefore, what we will see is a shift in grade because we were into a zone in which we have progressively higher grade to the balance of the year, some of that will shift, will be deferred, and we will be picking up either towards the very end of the year or early next year. And therefore, the guidance does reflect that. So it's the impact of the days that we've been down plus is the fact that the activity in the mine will resume and is resuming with certain progression, which means that the grade that we had expected, we'll probably see some deferral, and that's factored into the guidance range. Now with respect to the Centinela project, as I mentioned before, the project is progressing well. I think we are -- project schedule calls for completion of commissioning in 2027. And I think we've been consistent in that. And there is no change to that time line nor are we envisaging a change in the project cost as disclosed in the table that you have and which is included in the release. So we're not seeing any change there. We are obviously approaching the end of construction as we sort of moved into the second half and into 2027, which are the more challenging work streams because they involve integrating subsystems. They involve doing pre-commissioning tests and the like. But that -- the fact that we remain on schedule and on budget is still the case. In the case of the floatation sale, what's happened is that certain soil conditions have revealed that they require extra ceiling for optimal conditions. And we are lucky that we've sort of identified that now, and we're able to address that now. But that will happen within -- and that work is happening already will happen within the schedule that has been provided. So from that point of view, we still see fully that the project is, as I say, commissioned in 2027 and then that we sort of start the ramp-up, which we -- when we had the site visit, we also said that 2028 is the year in which we will see the ramp-up fully enforced and completed. So commissioning '27 ramp up '28, that remains unchanged.

Our next question comes from Daniel Major with UBS.

A couple of questions. The first one is just maybe a follow-on slightly to Ian's question, but on a different item. I guess the market is going to be focusing on the CapEx and production guidance for 2027 that you provide with your Q3. If you're thinking about CapEx, you've indicated directionally CapEx should be coming down. Can you just try just a little bit more sort of building blocks to that. You spent $3.3 billion at Centinela to date. Would you expect to have spent the majority of the budget there by the end of the year? And where do you see normalized sustaining CapEx across the group? And how sort of would you expect that to be trending into next year, just to give us a sense of the sort of quantum of step down in CapEx next year? Iván Herrera: Yes, we will provide guidance in the third quarter, but I will say a few comments and then pass on to Mauricio for more color, but what we see is that we've essentially passed peak capital spend for the project. And therefore, the trend is that we should see a lower number in 2027. But there's still capital spent to go in the project this year and next as I was saying, 2027 is a year in which we will be very much focused on integrating the systems and then doing the commissioning work there. But Mauricio, you may want to put more color into the components. Again, we will disclose that in more detail in quarter 3, but maybe we can give Daniel some color beforehand.

Yes. Just a bit more of color. Well, starting with the sustaining CapEx, sustaining CapEx has been in the rate to $1 billion to $1.5 billion, and we will stay there for the next couple of years, yes? That is regarding sustaining CapEx. Touching based on development CapEx. Well, peak CapEx is now behind. Remember that last year, we ran at $3.7 billion. This year, our guidance is $3.4 billion. We are well aligned to achieve that guidance for 2026. There is some tail CapEx related to Centinela on 2027. And I will say, in 2028 onward, we will be basically running at sustaining CapEx plus any additional growth alternatives that we may pursue. But at this stage, what we have in our directional guidance, as Ivan mentioned, much more precise number we provided later in the year. But directionally, that is what we have 2026, '27 some tail CapEx related to the project and 2028, roughly aligned with sustaining CapEx.

Okay. So by 2028, we should definitely -- if you're sustaining CapEx is $1 billion to $1.5 billion, assume CapEx is less than $2 billion. Is that a fair assumption?

Well, that is a number that we are going to provide in 2027, but that is the direction of the travel.

Direction. Okay.

Bear in mind this number, $1 billion to $1.5 billion is based in 2023 when we kick off our investment, our investment program. So that maybe could be something to factor in.

Okay. That's useful. And then just maybe a few specific questions, probably one for Mauricio. One, you booked an additional $630 million of lease liabilities into the net debt during the period. Is that number going to continue to increase as the water project is completed at Centinela? Or could you give any guidance on the cadence around other items in the net debt? That's the first one. The second one is the cash tax a few hundred million dollars higher than the P&L in first half would that reverse? And then the third one, I noticed I don't think Marubeni made any contributions to the CapEx during the period. Kind of why is that? And what should we be factoring in for that line item going forward?

Okay. Well, let me start with the water system. So I would say that -- and I want to tie in that answer with what Ivan mentioned, the project is progressing well. So one of the milestones during the first half of the year was actually the first water, yes, Centinela second concentrator already secured, it's water supply. So that's why the translate on that in our accounting is the lease accounting of that subsystem. Remember that we outsource this to a third party. They completed it and now, we are booking the lease of the equivalent amount. Interesting also then is that this facility will provide the water for the second concentrator, and there is also a lot in capacity to increase throughput in the district, if there is other opportunity to pursue. So that is very attractive, and that is basically the explanation on why we are booking this. Short answer to your question, if this number keep increasing. The short answer is no, because that is the full amount of the -- what the third-party invested. On cash tax, there basically, we have the settlement of our 2025 fiscal year, remember that how the system works in Chile, you pay proportional monthly payments during the year and then you have a settlement in April, and that is where basically what we have in our cash flow this first half, yes. Bear in mind that second half of last year we witnessed an important increase in copper prices and then that, of course, increased as well our tax charge that was settled in April. And regarding to capital contribution to Centinela, Centinela operating at $0.70 per pound as a net cash cost is producing attractive cash -- generating attractive cash from the operations. So I will say that we are facing contributions and debt drawdowns in a value-accretive way in order to minimize costs for the operation. So we are facing the three ways of -- the three sources of liquidity in order to optimize the financing.

Okay. So just a follow-up on the cash tax. I'm assuming you will accrue tax payables then in the second half that you'll pay out first half of next year. So there should be a positive differential between cash and P&L tax in the second half. Is that correct?

Yes, that's correct.

Our next question comes from Maxime Kogge with ODDO BHF.

So I had a first question. This is on sulfuric acid because it's quite of a huge topic at the moment. You have some vulnerability there given the size of your leaching operations. Can you give us some sense, perhaps of the sulfuric acid consumption by mine? Is there any big difference between the 3 mines that are using sulfuric acid. I think you're quite efficient there compared to peers, but any more precise view on that? And yes, what's your view into 2027 production for leaching, because in 2026, you're still protected by the benchmark for sulfuric acid. But in 2027, this will be reset. So yes, are you ready perhaps to split a bit of production at Centinela to concentrator or versus leaching? Any view on that would be helpful. Iván Herrera: Yes. So on the sulfuric acid, I mean, obviously, as a consequence of the sort of events, political events, we've seen an increase in the sulfuric acid spot price during the first half, which is what you were referring to. The -- we don't source sulfuric acid directly from the Middle East there, but from other regions. And therefore, we have not had an issue with the supply, the security of the supply into our mines. And they are sort of fairly distributed, I would say, between Antucoya and volumes for distributed between Antucoya, Zaldivar and Centinela. And therefore, we had the acid that's been required. Now obviously, higher prices reflecting the conditions that we've seen in the sulfuric acid market. I think we're now seeing those conditions that have sort of stabilized at a higher asset price level, but we see signs that, that may be easing. We have generally term contracts, and therefore, we're not fully exposed to the spot price, but we have some volume of significance, which is, in fact, built into those contracts. As we've secured the volumes for 2027, obviously, those prices are more reflective of current conditions, but are not exactly the spot price because they are driven by the long-term commitments involved in our contracts. So we expect essentially to be able to have the assets that we need to be able to operate as we have in 2026 for 2027, and therefore, continue to deliver on our hydro operations. Now we will provide guidance for next year in quarter 3. So I wouldn't like to go into breaking down how much with our leaching operations expect to produce next year because that's the subject of the next quarter. But -- as I say, we've secured the volume needed this year. So we have no interruption on the basis of securing the supply. Our prices are based on long-term contracts, and therefore, we've not seen the same increase that you will witness in spot prices. And we are -- we have secured volume for next year, which reflects partly the spot price increment. But as I've mentioned before, we've seen [indiscernible] also that in the spot price the conditions have moderated slightly. So we are -- our outlook is that things will gradually improve from this point onwards.

All right. And second one, yes, this is on TC/RC. I think, in the latest call you said that about 70% to 80% of your contracts were based on the benchmark and the remaining 20% to 30% based on spot. But since then, you have apparently been able to negotiate half year benchmark for, for H2 based entirely on index prices. So does it mean that the proportion of index prices is no predominant in your sales structure? And any view you might have on the 2027 benchmark? Will it still be there according to you? Or is it now gone for forever with the whole system, the whole marketplace switching to the next pricing? And yes, since you buy some sulfuric acid from the smelters and you sell to them the concentrate? Is there some way to tie the two aspects perhaps to prevent to significant rises in sulfuric acid costs? Yes. That's the second one. Iván Herrera: Yes. So with respect to TC/RCs, let me say that we negotiate those under term contracts as well. As we've said, some people call that benchmark system, but -- it's -- we, as I say, based our conditions on contracts which are negotiated between the parties every year and those are term contracts, and we will continue to use those contracts for that purpose. The basis on which pricing is agreed, it may evolve and change considering the market conditions, but I will -- because that's commercially sensitive, obviously, won't be specific about that. So that's as much as I can say on TC/RCs. I mean it's a favorable market for miners. We have long-term relationships with many smelting clients in very mature markets, and we have term contracts under which we secure the supply and the conditions on those.

[Operator Instructions] Our next question comes from Ioannis Masvoulas Morgan Stanley.

Most of my questions have been answered, but maybe one question on hedging. So I understand the majority of your asset exposure has been already locked-in for 2026. If prices were to remain elevated going into '27, would you still employ the same strategy of hedging the majority of your exposure? And maybe have you changed your hedging consideration on the diesel side, if again, diesel prices were to remain elevated. How would you think about potentially hedging for '27, which is something you haven't done in '26? Iván Herrera: Yes. Thanks for the question. We generally do not hedge our commodity input prices. So we believe that as much as we're exposed to copper price and gold and moly price and silver price through the commodities that we sell, we are best served to protect our margins. If we remain exposed to the commodities that we buy, including in this case, oil and assets. So we do have long-term commercial relationships on the basis of term contracts that provide for security of supply and competitive long-term pricing mechanisms. But we do not, as a general practice hedge our input costs like fuel and others.

Okay. Maybe just to follow up on the acid side. Based on the structure of the term contract, how much of the spot price exposure will be reflecting to your 2027 gross sales? Iván Herrera: I mean I think that -- well, that's dependent on each contract and operation. But we would expect that trend to obviously be reflected in those prices. How much that's very contract-specific and not something that I can sort of share openly because it depends on the contracts specifically. But the trend that you would expect to see is if we've seen a significant increase in the spot price, an important proportion of that would be reflected but it depends on the contract.

Our next question comes from Ben Davis with RBC.

It's Ben here from RBC. Just a couple of quick questions for me. One be great just to get some more color on the Twin Metals project always, I mean its bouncing back and forth in the court, just how you see that playing out for the next couple of years or so? And then just quickly also, obviously, the storm that we had was a huge outlier in terms of kind of the severity of it. But has the winter weather in general, been getting worse over the past few years? Or do you put any store to the fact that this is some sort of El Nino effect or anything else? Any color there would be helpful. Iván Herrera: Yes. So with respect to Twin Metals, I mean, as we've shared in the past, I mean, we continue to see the project as an attractive one in the current public policy environment in the U.S. we believe that we have the ability to make some significant progress. I think what happened is, as we would know, that the withdrawal that had been passed which ban mining in the area has been reversed, which is good news. And then we are basically working in a recovery of the leases for the main mature area and essentially working on the terms and conditions under which those would be handed back. So once we do that, we would expect to be able to have the ability to progress some of the other aspects, which are significant around initiating permitting. So we continue to have conviction around our ability to develop this over the years. It's what we've called a long-dated option, but we still think that every step that we can make advancing this and especially in the current environment is something that we should take the opportunity to do. On the storm, I would say that it is what we think quite unique in the sense that, again, in the history of Pelambres, this is in our record, probably the most severe event that we've had. Now whether winters have been becoming more worse or severe. I think we've had -- the pattern that we're observing is that we've had, in fact, a prolonged drought in the region where Pelambres is -- would span 12 years in which there was very little rain. And that's now being combined with very intense rain and snow event like the one we've had here, which basically happened in a very, very compressed and short period of time. So we have both extremes, a persistent drought, which I think is the sort of underlying condition that we expect to continue to see and for which we have essentially developed the water solution that you know, which involves that we are increasingly becoming independent in our water supply from continental sources and probably combined from what we see now because of El Nino, which does not happen every year in which we've had a very, very significant rain and snow event in a very compressed period of time. So our -- if you look at our infrastructure at Pelambres, I mean, we did not have any significant impact damage into our infrastructure or equipment, but obviously, the issue that's impacted us most is the fact that we, for safety and prudency reason did an orderly halt or suspension of activities and are doing an orderly as well ramp up back of activities, which in the case of the mine because of the amount of snow involves cleaning up some areas from snow and some of them, which are very high in the mountain, take a little bit more of time. So -- it's unique in that sense, and it's very different to the prevalent condition, which is drought. But as always, we've done this in safe manner. And the issue has been more removing the 5 million cubic meters of snow, which is a lot of material for any mine and doing that in an orderly way so that we can begin mining in all sections. We're essentially back, but we've got some areas in which we still have to do some clearing of snow, and that means that our grade fed into the plant, in the balance of this year will be slightly lower at Pelambres than we had originally anticipated and hence, the change in the guidance.

Got you. That's very helpful. Just a quick follow-up on Twin Metals. Can I just -- is there any work happening outside of the kind of obviously, the legal cases? Are you doing any study or exploration work at the asset? Iván Herrera: We are. We've got -- I mean, we are doing work in preparation of updating our pre-feasibility and also, so there's some work being -- I mean the work being done there. And we're also doing some and continue to do some drilling in other properties that form part of the Twin Metals complex, but are not located in Maturi in other places where we hold valid exploration licenses we still -- yes, we are doing some drilling.

The next question comes from Matt Greene, Goldman Sachs.

Mauricio, perhaps a couple for you. But you flagged here just some of the inflationary consumable pressure you're seeing on your operating costs. But just wondering if you could maybe touch on where you're feeling some of the pressure on your CapEx, because you are going through a number of earthwork-intensive projects with the Encuentro development, the Pelambres pipeline, TSF. So just if you could just touch on -- are you seeing a lot of pressure on the CapEx side of the business? I know you've locked in a lot of your sort of EPCM contracts. But just if you just touch on where you're seeing some pressure there, because I guess it's quite encouraging to see that your CapEx guidance is unchanged.

Yes. Well, I would start remembering how our portfolio looks like this year. So this is roughly $2 billion of development CapEx associated to Centinela second concentrator and Pelambres. I remember that we announced these 2 projects, one of the key feature of this project that we were able to lock in the bulk of the cost on contracts with EPC contractors. So there is little exposure to diesel prices on those big projects. Where we have exposure to these prices is in mine development, but the people at their operation, our teams at the operations are doing a good job optimizing the routes and the diesel consumption. So -- we do have exposure to diesel. We do have some inflationary pressures driven by higher fuel prices. Yes, basically isolated in the mine development, but I can see today a risk to be outside of the number that we guide for total CapEx for 2026.

Okay. That's great. And then just on your unit cost year-on-year. I mean your controllable costs have increased almost as much as your -- the external pressures you're facing here. I appreciate some of that relates to just to some of the operational performance. But can you just touch on how much of this is transitory versus how much is actually structurally coming into the business?

Well, if you have a look on our net cash cost, basically, we were able to reduce 8%, $0.10 per pound year-on-year. Yes, there is a strong performance driven by two things mainly: one, the byproducts. The other one is the competitiveness program that is a key feature as well of Antofagasta. We do have some inflationary pressures, but we are absorbing with these two factors. And the one that we are going to improve significantly in the second half is production. So I'm confident that we are going to deliver on our guidance on net cash cost for the full year.

I'll now hand over to Rob Simmons for written questions. Rob, please go ahead.

Thank you. First written question comes from Patrick Jones at JPMorgan. The new administration in Chile has passed legislation to cut corporate tax rates. What impact do you expect this to have on the company's effective tax rate going forward? Iván Herrera: Okay. So that's a question Rob?

Correct. Iván Herrera: Okay. So that's still a legislation, which is in the process of being considered and approved in Congress. So it's still not in place. And it does essentially include a reduction in the corporate income tax rate from the current 27% to 23% over a period of a few years. The -- so if that is enacted, we would get the benefit of that reduction. Although our total tax when it includes withholding tax because withholding tax operates as the top-up tax would not change. But we would get that benefit in the -- at the corporate tax level, not well, as I say, when we top up for dividend purposes. So it's likely to be more of a temporary benefit. And we would, however, get the benefit on our deferred tax calculations, which is something that we should review when -- and if this is turned into law. So overall, the direction of this is positive in the sense that we think it reduces the levy of taxation. Some of it transitory. But from that point of view, it does introduce an extra element of competitiveness, which is very important. And generally, the build where this is honed is one which has got that inspiration of being able to promote investment and business activity and employment. So positive from that point of view.

The second written question comes from David Radcliff at Global Mining Research. The question is as follows. You have had your 19% stake in Buenaventura for more than 2 years now. Is there any additional clarity that you can provide in terms of strategy? Are you considering taking profits or distributing shares to Anto shareholders to realize the value? Iván Herrera: So in Buenaventura, I think we've had a entry at a good point in time. And the purpose we had was to be able to build a beachhead in Peru. We like Peru for mining purposes. And alongside our share in Buenaventura, we have our own exploration team looking for opportunities. And since we've joined, the company has done well, certainly, that the price conditions have been beneficial and we've seen an important benefit out of joining Buenaventura. And we continue to work with the company with its Board and management. We are members of the Board. In fact, Mauricio and myself sit in the Board and therefore, continue to work to develop the projects that they have. And obviously, we're very interested in the possibilities and opportunities that they have in copper. But we see this with the perspective of the opportunities that we can jointly continue to work on and develop. So that remains unchanged from a strategic point of view and granted that we do recognize that the results have been very positive since we went into the company.

The final written question is as follows. You mentioned a strong EBITDA margin of 63%, which is a historical record. Will this stronger margin persist? Or is it largely the result of the stronger pricing of the byproduct metals this quarter? Iván Herrera: Yes. I mean -- certainly, our focus remains on keeping the competitiveness of our costs. We have very competitive costs, net cash costs, which involved both elements: one, the discipline with which we manage our cost base and also the benefit of our byproducts, but we continue to work on this. We've also shared that we have a competitiveness program, which is delivering results. And after many years of having been in place, it continues to deliver results. Now going forward, we won't change the focus on cost which is behind a strong EBITDA margin. We have also the startup when the project is finished of the second concentrator at Centinela, which gives us extra scale and the ability to continue to reduce unit costs. Part of the strategy around the development of the second concentrator is actually moving Centinela to the first quartile. So cost management and cost competitiveness across the board, will continue to be a key priority, which is what we believe will sustain the high EBITDA margins that we've recorded. Obviously, those margins are also dependent on prices. But our view is that we control our costs. We work to reduce them and keep them competitive and that is the best strategy, which will serve us well throughout the cycle. So it's very much a feature that we are on top of and it's a priority that we continue to systematically work on.

That concludes the written questions. We have one final question from Ian Rossouw with Barclays.

Just a follow-up for Mauricio, and sort of basically alluding to what Dan was asking. Is the intention still to draw down entirely on that $2.5 billion project finance facility for the Centinela second concentrator? Just thinking, obviously, you didn't in the first half draw down on that facility at all given the strong cash flow if Centinela generates another good year of cash flow next year, could you also still fund that from operating cash flows? Or is the intention to fully utilize that $2.5 billion facility.

Well, Ian, we have a plan and we announced the plan, and we are delivering according to the plan. So time differences are just time difference. But along with a strong engineering design, we also designed a very strong financial strategy to deliver Centinela second concentrator. So we're executing. If there is time difference, it's just time difference.

So the plan started to draw down fully on that project facility?

Yes.

We've had a follow-up question coming from Daniel Major with UBS.

Yes, just one on -- just a reminder, I know you're obviously focused on delivering the current phase of the Centinela expansion. But in the past, you've talked of a multi-phased expansion and the additional optionality the ore body has. Can you just remind us where the permitting would sit with that in terms of medium to longer term, what permitting would be required to incrementally expand the concentrator again on the longer-term time horizon? Iván Herrera: We -- and in the permit that we have in place includes the current phase, which is the construction of the concentrator, and also an increase up to 150,000 tonne a day of capacity. So essentially, all of that is covered in the current mother permit, if you want. So that's the answer. Both these phases are included.

Okay. And Mauricio, you alluded to earlier, you have -- would you have additional water infrastructure capacity to take up to 150,000 tonnes as well?

Yes, there is additional water infrastructure capacity to increase throughput in both concentrators.

There are no further questions. I therefore hand back to Ivan for closing comments. Iván Herrera: Thank you. Well, thank you for joining us today. I hope that we've sort of addressed your questions and queries, but if we haven't, please feel free to reach out to Rob in our London office, should you have any further questions. And then just to summarize then, we think we've delivered a set of strong financial results, on the basis of our focus on cost and also on a favorable set of market price conditions. We continue to make good progress on our projects. And just to reiterate something which has been asked in the case of the second concentrate, we expect to complete the commissioning in 2027 and ramp up the operation in 2028. And in the case of Pelambres, we also, in terms of the growth-enabling project are making good progress and expect to largely commission that infrastructure next year. And because of the severe weather event. We've adjusted our production guidance. But we've done and confronted this event, which is quite unique in the history of Pelambres in a very safe and orderly manner, and that's the way that we've accomplished our shutdown and are ramping up operations in a very prudent way. And because we are in the half of winter, we are then factoring into our new range the possibility of there being more conditions associated to the winter in what's left. So with that, again, thank you very much, and we're happy through our London office to continue any further questions and dialogue. Thank you very much.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.