The Zhitong Finance App learned that the Metals and Mining Research Report released by Deutsche Bank on November 1 indicates that the third quarter earnings season is nearing its end, and most of the companies covered have already completed disclosure. Overall, three themes stand out: continued cost inflation, lower copper production guidelines, and a challenging macroeconomic environment. Cost pressure is still evident across the industry. Rio Tinto (RIO.US) raised its iron ore unit cost guidelines, First Quantum Mining raised its copper cash cost guidelines, and Norway's Hydro indicated that costs would rise further in the fourth quarter.
Cost pressure and lower copper guidance
Iron ore margins have been particularly squeezed. The combination of low spot CFR prices (about 91 US dollars/ton), high freight and high diesel costs caused the absolute EBITDA and unit profit margin of iron ore to fall back to 2017/2018 levels.
Copper production guidelines have generally narrowed or declined: McMoRan Copper and Gold (FCX.US) lowered the 2026/27 copper production guidelines, First Quantum narrowed the 2026 production range, and Antofagasta lowered the 2027 guidance to lower than market expectations. Major mining companies — BHP Billiton (BHP.US), Anglo-American Resources, Glencore, and Rio Tinto — all weakened copper production in the third quarter and is currently trending towards the lower end of the guidance range. Weather disturbances and declining grades are still recurring themes, and companies such as TECK.US (TECK.US) and Boliden have all been affected.
Core individual stock trends
Antofagasta: Guidelines revised, rating raised to “hold”. Following the release of the Q3 production report, Deutsche Bank updated its forecast and upgraded the stock's rating from “sell” to “hold” with a target price of £33. Over the past month, the stock outperformed copper prices and listed peers by about 5% to 15%. According to the research report, the revised guidelines reflect a more attainable level. Since the rating was downgraded at the beginning of the year, Antofagasta's valuation premium over its history has completely returned. Although the stock's valuation based on the 2027 estimate is still higher than its peers (EV/EBITDA about 9 times and 6 to 8 times that of the same industry), the premium will narrow significantly as production growth is realized in 2028 and beyond. Based on 2029/30 estimates, Antofagasta's EV/EBITDA is about 7 times, which is close to Anglo-American resources and McMoRan copper and gold.
Rio Tinto: The OT mine is ready to restart, giving it a “holding” rating. Rio Tinto (66% holding 66%) is preparing to restart underground operations safely and in a controlled manner after the earthquake in Oyutalegai (OT mine) in Mongolia caused a rock collapse. Preliminary inspections indicated that the incident was local and had no structural impact on the quarry or operational infrastructure, easing initial market concerns that one of the world's largest copper mines could be interrupted for a long time. Therefore, the research report expects limited impact on OT mine production and the copper market.
Lundin Mining: The Q3 earnings report will be released soon, giving it a “holding” rating. Lundin Mining will release its Q3 earnings report after the market on November 4, and is the last company covered to disclose results. Deutsche Bank expects its adjusted EBITDA of US$639 million, slightly exceeding market expectations, down 5% month-on-month, reflecting a decline in Caserones production due to the disturbance of the Chilean winter storm. Lundin Mining lowered its 2026 copper production guidelines by 3% to 300,000 to 325,000 tons (previously 310,000 to 335,000 tons). Cost inflation remains a key theme, and higher costs are expected to partially offset strong copper prices this quarter. Looking ahead to Q3, the key focus is still on the Vicuna project, and the update of the first phase capital expenditure estimates is a core focus.