Miner feels heat as drought hits copper
AntofAgAstA shares headed underground after the mining giant predicted lower copper production next year amid a punishing drought in Chile.
The FTSE 100 group said it was on track to hit its target of between 710,000 and 740,000 tonnes of copper this year.
However, this was expected to drop to between 660,000 and 690,000 tonnes in 2022.
Chief executive Ivan Arriagada said there had been no rainfall at the company’s Chilean operations as it headed into the summer months and none was expected until the start of June.
Chile has been gripped by drought for a decade. The drought affects Antofagasta’s operations as getting metal from the ground requires lots of water.
The firm also said it was facing ‘external pressures’ from global supply chain bottlenecks and soaring energy prices. The shares fell 0.9pc, or 14p, to 1462p as investors digested the bleak outlook.
AJ Bell analyst Danni Hewson also warned that rising global prices for copper and commodities could prompt ‘a wave of resource nationalism’ as countries like Chile seek to repair the public finances following the pandemic.
Fellow miner Rio tinto was also in the red, dropping 3.3pc, or 164.5p, to 4885.5p, after unveiling plans to spend £5.4bn to halve its carbon emissions by 2030, more than tripling its previous target.
The ftsE 100 inched up 0.08pc, or 5.57 points, to 7223.1 while the ftsE 250 was down 0.38pc, or 87.42 points, at 22966.67.
Investors seemed uncertain as data showed inflation was still elevated, although the figures did not include the effects of energy prices and supply chain issues.
Travel and leisure stocks turned negative as UK Covid cases continued to surge, raising fears of fresh restrictions. BA owner IAg descended 4.9pc, or 8.1p, to 157.5p while Whitbread, the owner of the Premier Inn hotel chain, dropped 2.9pc, or 95p, to 3195p.
Budget airlines were also hit, with Easyjet falling 3.6pc, or 22p, to 591.2p while Wizz Air sank 3.1pc, or 140p, to 4321p and Ryanair lost 1.7pc, or €0.3, to €16.03.
Warehouse developer segro reported a surge in new rent for its third quarter as the end of pandemic restrictions and supply chain disruption led to a boom in demand for storage space.
For the three months to October, the firm said it signed £26m in new rents, up from £16m in the same period a year ago, adding that its vacancy rate had dropped to 3.2pc from 4.3pc as a result of strong post-lockdown demand. Despite the update, the shares slipped 1.7pc, or 22p, to 1266.5p.
Elsewhere, Hammerson, the owner of the Bullring shopping centre in Birmingham, sank 4.1pc, or 1.4p, to 32.01p after it said footfall in its markets was still 15-20pc below pre-pandemic levels.
However, the retail landlord noted that some of its UK locations saw customer footfall rise above 2019 levels during the August bank holiday. The firm also flagged that it had collected 70pc of rent due in its fourth quarter, ‘significantly ahead’ of any quarter since early 2020.
Consumer review website trustpilot slumped 12.8pc, or 48.6p, to 330p after a group of the company’s pre-IPO shareholders bagged £142m after dumping 41.1m shares for 345p each, a nearly 9pc discount on its Tuesday close.
Metro Bank was also on the slide, falling 5.4pc, or 6.3p, to 110.1p as its lending stalled amid lower demand for mortgages. For the three months to October, it reported loans of £12.3bn, saying growth in consumer loans and specialist mortgages had been offset by falling numbers of residential mortgages as well as lower demand for commercial loans.
One bright spot was B&Q owner Kingfisher, which flew 1.9pc, or 6.2p higher, to 336.6p after its CEO and finance boss bought shares following a recent price dip.