Antofagasta (ANTO) releases CO2 emissions details. Is it worth buying?

HIGHLIGHTS

  • Nine mining companies released details about their carbon emissions from operations on the London Metal Exchange digital ledger, also known as LMEpassport.
  • Antofagasta has announced a pilot initiative in collaboration with the HYDRA Consortium to test the use of hydrogen in large mining equipment.

Nine mining companies, including Antofagasta Plc (LON: ANTO), released details about their carbon emissions from operations in the London Metal Exchange digital ledger, also known as LMEpassport. Other companies that have disclosed their emissions from operations include Teck Resources, Boliden, Companhia Brasileira de Alumínio (CBA), Thailand Smelting and Refining, Rusal, Anglo American Platinum, Freeport-McMoRan, and Zhejiang Huayou Cobalt.

What is LMEpassport?

LMEpassport is a registry aimed at users of the London Metal Exchange who intend to support energy transition to reduce carbon emissions and shift to alternative energy sources. LME’s sustainability taxonomy includes environmental, social and governance (ESG) issues.

Transition to renewable energy

The energy transition encompasses a shift from internal combustion vehicles to renewables such as wind and solar, and electric energies. Mining and smelting firms engaged in the production of metals such as aluminium, copper, tin, nickel, and cobalt have been focusing on their carbon emission credentials and addressing international sustainability standards.

Antofagasta’s green initiative

Antofagasta announced a pilot initiative in collaboration with the HYDRA Consortium to test the use of hydrogen in large mining equipment and thereby reducing its greenhouse gas emissions. Some of the other members of the consortium include Engie, Mining3, Mitsui & Co. (U.S.A.), Inc., and Csiro Chile.

This pilot drive aims to replace the use of fossil fuels such as diesel for the operation of high tonnage vehicles used in mining. The company, along with other members of the consortium, intends to install a battery-powered prototype powertrain and hydrogen fuel cell for a hybrid FCEV set-up at Minera Centinela.

Share price performance of Antofagasta

The FTSE 100 listed Antofagasta Plc is trading at GBX 1,433.00, down by 0.62% in the early hours of trade at 8:06 AM GMT+1 on 13 October 2021. The shares of the company gave a return of 39.66% to shareholders in the last one year, and its market capitalisation currently stands at £14,216.05 million.

Financial performance

The company reported a revenue of $3,591 million for H1 2021, up by 67.9% year-on-year, mainly due to higher copper prices. It recorded an EBITDA of $2,357 million, representing a year-on-year increase of 132.7%.

Antofagasta’s board announced an interim dividend of 17.0446 pence or US 23.6 cents per ordinary share to shareholders for the H1 ended 30 June 2021, up by 280.6% compared to its interim dividend in 2020.

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