LONDON - Chile's Antofagasta saw profit surge to its highest ever in 2021 on strong copper and molybdenum prices, allowing it to dish out a record shareholder payout of $1.4-billion for the year.

The London-listed miner, majority owned by Chile's wealthy Luksic family, said its earnings before interest, tax, depreciation and amortisation (Ebitda) rose to a record $4.8-billion in 2021 from $2.74-billion a year earlier.

It also declared a final dividend of 118.9c a share, bringing the total for the year to 142.5c.

Rivals Glencore and BHP Group have also announced hefty payouts to investors this earnings season, buoyed by strong commodities demand.

Chief Executive Ivan Arriagada said the results showed the group had "the operational and financial strength and balance sheet to deliver on our promises".

Copper prices broke records in 2021 while molybdenum, used in stainless steel, rose 98%.

Chile, the world's top producer, largely maintained output even during the worst of the pandemic. Copper is essential in construction and electric vehicle manufacturing.

Antofagasta said its capital expenditure rose 36% to $1.77-billion in 2021 due to the expansion of its flagship mines Los Pelambres and Centinela. It expects capex to increase by $1.7-billion to $1.9-billion in 2022 on expansion costs and water shortages.

Shares initially fell but bounced back to 1.3% higher by 08:53 GMT.

Antofagasta set 2022 copper production guidance at 660 000 t to 690 000 t at a net cash cost of $2 per pound. 

It also booked a $178-million impairment after its proposed copper and nickel mine Twin Metals in Minnesota was blocked by the US Department of the Interior's decision to cancel two mineral leases on domestic conservation concerns. Read full story

Mining companies are also facing higher inflation costs.

Investor sentiment on Antofagasta was "generally negative" because of cost inflation in Chile, the risk of higher Chilean mining taxes, operational challenges, and the potential for capex to rise further, analysts at Jefferies said.