Chile-focused miner Antofagasta has revealed a surge in profits thanks to the improving copper market, allowing it to offer shareholders a bumper payday.
The FTSE 100 firm reported a profit before tax of $1.8bn (£1.3bn), up from $284.6m in 2016, while revenue rose 31.1 per cent to $4.7bn, mainly due to an increase in the realised price of copper (up 28.8 per cent) and copper sales volumes (up 1.5 per cent).
Group copper production for 2017 fell 0.7 per cent to 704,300 tonnes, but output was in line with expectations.
The company declared a total dividend for the year of 50.9 cents per share, a whopping 177 per cent higher than 2016's payout.
Antofagasta rose to the top of the blue-chip index in morning trading with shares up 2.55 per cent at 910.4p.
Why it's interesting
Antofagasta produced a strong year-on-year performance in 2017 due to the increase in copper prices and strict cost controls.
Production in 2018 is expected to be in the range of 705,000 to 740,000 tonnes as the firm's Encuentro Oxides copper mine reaches full capacity.
The miner expects the copper market to tighten in the second half of 2018 and to be in balance or in a slight deficit for the full year. From 2019, it said the likelihood of the market being in deficit is expected to rise due to the long-term issues of declining grades and a lack of new investment.
Demand is set to keep growing, however, and Antofagasta said the rise in demand from electric vehicles and renewables, in which copper is a key element, will be "significant" if they develop at the rates analysts expect.
What Antofagasta said
Antofagasta's chief executive Iván Arriagada said: "We have continued to invest through the cycle while maintaining our focus on cost discipline and operating performance. As a result, as copper prices rose in 2017 Antofagasta had another successful year completing the development of Encuentro Oxides, meeting our safety target of zero fatalities and achieving both our production and cost guidance."
Our priorities for 2018 are continued capital discipline and the next phase of our growth - notably the review and expected approval of the Los Pelambres Incremental Expansion project and progressing expansion plans at Centinela.