Antofagasta PLC

Antofagasta is a large scale, low cost copper producer with good opportunities for growth. Antofagasta (Chile) and Bolivia Railway Company (Fags) lists on the London Stock Exchange and takes over operation of Antofagasta-Bolivia railway link. Luksic Group acquires Fags, which is renamed as Antofagasta Holdings plc and becomes vehicle for Luksic's copper mining, financial, and industrial investments. Company launches production at Los Pelambros, which becomes one of the world's largest and lowest-cost copper producers; changes name to Antofagasta plc. Antofagasta plc is one of the world's leading producers of copper, with total production levels nearing 472,000 tons in 2003. The focus of the company's operations is its Los Pelambres mine site, which began production in 2001 and has extended its life expectancy to some 50 years. The Los Pelambres site represents nearly three-quarters of the group's mining revenues. The shift of its mining focus to the Los Pelambres site has also enabled Antofagasta to claim a position as one of the global copper market's lowest cost producers, at just 36.4 cents to the pound. Antofagasta also holds controlling stakes in two other mines, El Tesoro, which adds 16 percent to the group's revenues; and Michilla, which represents 9.5 percent of Antofagasta's total mining revenues. Since the late 1990s, Antofagasta has restructured itself as one of the industry's most focused mining groups--more than 93 percent of the company's revenue comes from its mining operations. Nonetheless, the company continues to participate in two other important and related areas. The company's Transportation division oversees its monopoly control of the FCAB railroad linking Antofagasta in Chile to the Bolivian border, a 650-kilometer stretch of railroad crossing the Andes, which also represents the company's historic core operation. The company also operates the Bolivia-based Andino rail network, and a road-based door-to-door transportation subsidiary, Train Ltda., servicing the northern Chile region. Antofagasta's Water and Forestry division oversees its water pipeline and treatment operations, originally an offshoot of its railroad business, as well as the company's 32,000-hectare forest holdings. The company has moved to expand its water operations, and in 2004 was awarded a 30-year concession for the water distribution and treatment rights in the Antofagasta region. Yet mining remains the focus of the group's efforts, with an active exploration program in place, including a stake in Chile's Esperanza Project, and exploration partnerships in Peru. Listed on the London and New York stock exchanges, Antofagasta is controlled at more than 60 percent by Chile's powerful Luksic family. Toward the mid-1800s, British interests joined with the Bolivian government to construct a railroad crossing the Andes mountain and linking Huanchaca to the port of Antofagasta, along the Pacific coast. Founded in 1867 as a small fishing village, Antofagasta, which means "hiding place for copper" in Quechua, soon after became an important port town with the discovery of significant nitrate and other mineral deposits, including copper, in the Atacama desert. The construction of the initial interior portion of the railroad, starting from Antofagasta, was originally completed under Compañía de Salitres de Antofagasta. Construction continued into the 1870s, and the resulting railroad represented one of the era's significant feats of engineering--as it neared the Bolivian border on its Collahausi branch (later shut down) the line topped an altitude of 4,827 meters, becoming the world's highest railroad. Antofagasta and the Atacama region originally belonged to Bolivia and represented that country's link to the Pacific ocean. Nonetheless, Chilean interests were active in the region's early mining operations, including the production of nitrates, used for fertilizers and explosives, and copper. The importance of the nitrate trade in particula