The wealth of Latin America’s two largest copper billionaires doubled over the past year, driven by record prices for the metal used in wiring, which have outperformed the shares of more diversified mining companies.
By James Attwood y Marcelo Rochabrun
Germán Larrea, who controls Southern Copper Corp. through the conglomerate Grupo México, saw his fortune rise to US$71.6 billion over the past 12 months through Wednesday, while the net worth of Iris Fontbona, matriarch of Chile’s Luksic family, which controls Antofagasta Plc, increased by 91% to US$55.6 billion, according to the Bloomberg Billionaires Index.
Together, both billionaires generated US$64 billion in new wealth over the past year as a result of record copper prices. This month alone, shares of Phoenix-based Southern Copper have risen by nearly 40%, while Antofagasta’s shares are up almost 17%.
Representatives of Antofagasta and Grupo México declined to comment.
Copper prices have surged as shipments flow into warehouses in the United States amid the possibility of tariffs, draining inventories in Asia and Europe. Investors are also optimistic that the world will require significantly more cabling, whether for data centers powering artificial intelligence, electric vehicles, or other electronic devices.
Copper supply has also been affected by a series of incidents at major mines around the world, while a weaker dollar and lower interest rates have provided additional support to commodities. A normalization of supply disruptions could lead to a price pullback, but favorable long-term factors continue to underpin the market.
Even so, Goldman Sachs Group Inc. has warned that the metals rally could be at risk due to weaker demand from manufacturers in China.
“Direct demand”
Southern Copper and Santiago-based Antofagasta derive a significant portion of their revenues from Chile and Peru, which together host by far the world’s largest copper deposits.
“They are ‘pure-play’ copper producers, and the market generally views them as direct exposure to the commodity,” said Juan Ignacio Guzmán, director of mining consultancy GEM. “By contrast, buying shares of companies such as Rio Tinto or BHP Group Ltd., which have diversified investment portfolios, dilutes exposure to copper, precisely the commodity that is performing best at this time.”
Over the past year, shares of Antofagasta and Southern Copper have more than doubled, significantly outperforming BHP and Rio Tinto.
In 2024, Antofagasta and Southern Copper accounted for just over 7% of global copper supply, according to company data and Bloomberg Intelligence. One of the world’s largest copper producers is Codelco, a Chilean state-owned company that, as a result, has not created billionaires.
While Larrea, 72, is most commonly associated with his 60% stake in Grupo México, the conglomerate in turn owns 89% of Southern Copper. The Chilean company is now one of the world’s largest mining firms, with a market value of US$158 billion, compared with US$93 billion for Grupo México.
Fontbona, the widow of mining magnate Andrónico Luksic, also owns the majority of Antofagasta, with a 70% stake. This means that relatively few shares of Antofagasta or Southern Copper are available on global stock exchanges.
“More than family control itself, the key advantage lies in the constraint on capital supply that such control generates,” said Juan Carlos Guajardo, founder of Plusmining, a mining markets consultancy. “In an environment where global investors are seeking direct exposure to copper, this scarcity amplifies the impact of marginal demand and leads to more pronounced valuation increases.”
Chile’s president-elect, José Antonio Kast, a conservative, recently appointed the chief executive of the Luksic family’s investment holding company, Quiñenco SA—which excludes Antofagasta—as his new minister of foreign affairs. Francisco Pérez Mackenna will assume the government post in March.
Source: Yahoo Finance