Antofagasta ($ANTO)'s cash costs before by-product credits rose 19.6% to US$2.81/lb over the first nine months of 2026. Its net cash cost rose only 3.2% to US$1.28/lb. Both appear in the company's 15 October report. The difference matters to anyone using a copper cost curve to judge how a business might fare in a downturn. Original report, pp. 1–2.
A net cash cost deducts the contribution from other products. Those receipts are economically useful: a company can spend the money regardless of which metal generated it. The investment question is how reliably the company can keep receiving it.
Antofagasta reported nine-month by-product credits of US$1.53/lb, up 38% year on year, supported by higher realised prices despite lower by-product output. These cash-cost figures are non-GAAP production measures, rather than a calculation of cash available to shareholders. Cost explanation and definition.
A lower net cost can have two causes
An operator can reduce spending to produce each pound of copper. It can also earn more from the gold or molybdenum produced alongside it. Either can improve net economics, but they respond to different risks.
An enduring improvement in recoveries or plant reliability may remain useful when prices soften. A higher by-product price may reverse without any change in the copper operation. A model that attributes the whole net-cost improvement to management efficiency would confuse those effects.
The quarter itself demonstrates the distinction. Third-quarter costs before credits fell to US$2.73/lb, while credits fell to US$1.35/lb. Net cash cost consequently edged up to US$1.38/lb, against US$1.36/lb in June. Quarterly cost table, pp. 1–2.
The operating improvement still deserves credit. It simply did not translate into a lower net figure once the other receipts changed. Investors who look at only one of the two cost measures can miss that quite ordinary commercial explanation.
Stress more than the copper price
For 2026, Antofagasta raised gross cash-cost guidance to US$2.60–2.70/lb, retained net guidance of US$1.15–1.35/lb, and retained US$3.4 billion capital expenditure guidance excluding Zaldívar. Guidance and footnote, p. 2.
A downside case should therefore consider a change in credits alongside copper prices and operating expenditure. Holding every by-product receipt at a favourable level while reducing only copper gives a partial picture of the business's exposure. Conversely, setting all credits to zero would be an extreme assumption, not a neutral base case.
The choice needs to follow the question. To compare underlying operating expenditure between assets, the pre-credit measure is useful, subject to differences in definition and production basis. To assess the actual economics of a multi-metal operation, the credits belong in the model. To estimate shareholder cash, capital spending, taxes, financing and other cash movements still have to be reconciled.
The positive case is that valuable co-products provide an additional source of receipts and improve the economics of the orebody. That benefit should survive a fair valuation. The caution is against assuming that a particularly helpful pricing combination will continue throughout a mine's life.
We would read Antofagasta's gross and net figures together. The report supports a more interesting investment discussion than declaring the mine either expensive or cheap from a single number. It also shows why a cash-return comparison across copper, coal and gold needs consistent definitions before the rankings mean much.