Business model

Creating value through the mining lifecycle

Antofagasta has consistently created value for our shareholders as a result of our expertise in the discovery of copper resources and the subsequent development and operation of copper mines.

The organic growth we have achieved as a result of our in-house exploration work has allowed us to exercise full control from the outset over how our projects are developed. Given that much of the potential value of a mining project is realised (or lost) during the evaluation stage when the optimal nature of the project is determined, this control has enabled us to maximise the value we can create from our mineral deposits.

Investment versus income

Mining is a long-term business. Timescales can run into decades. The period from initial exploration to the start of production often exceeds ten years. Then, depending on the nature of the project and market conditions, it may take more than five years of operation to recoup the initial investment. Mines usually plan to exploit higher-grade areas towards the start of the mine life, in order to maximise returns from the operation. As a result, average ore grades may decline over time, with production volumes decreasing along with revenues.

This fall in revenues, however, depends on commodity prices. These tend to be cyclical, so even as production volumes decline revenues can increase, and vice versa. Long-life and low-cost operations increase the likelihood of a mine being able to benefit from the peaks in the commodity price cycle while withstanding the troughs. Also, during the life of a mine there will often be expansions that help it to keep down its unit costs of production – the most important financial KPI on a mine.


The Group's mining operations are dependent on a range of key inputs, such as energy, water, labour and fuel. The management of these inputs has a significant impact on operating costs, so ensuring the long-term availability of key resources is a vital part of supply management.


  • Labour
  • Financial capital
  • Mineral resource-rich land
  • Energy
  • Water
  • Reagents
  • Plant and equipment
  • Services and supplies
  • Fuel


  • Employees and contractors
  • Customers
  • Suppliers
  • Neighbouring communities
  • Environment
  • Government and public authorities
  • Infrastructure providers