RBC Capital Markets has downgraded Anglo American PLC (LSE:AAL) and Antofagasta PLC (LSE:ANTO), highlighting challenges within the diversified mining sector.
Anglo American’s rating was reduced to 'underperform' from 'sector perform', with a lower price target of 2,200p, down from 2,400p.
Analysts noted that Anglo's restructuring progress faces mounting hurdles, including delays in spinning off its De Beers diamond business amid a challenging market where diamond prices have fallen 20% in the last year.
Concerns also extend to its costly Woodsmith fertiliser project, where finding a partner remains elusive.
Antofagasta similarly saw its rating cut to 'underperform', reflecting concerns about its exposure to copper price volatility.
RBC highlighted that copper prices, which have risen 8% this year, may face a correction to $4 per pound amid potential headwinds from a US-China trade war.
RBC emphasised Antofagasta's capital expenditure burden, with its Centinela project costing $4.4 billion by 2027.
Despite these challenges, RBC maintains a neutral sector outlook, favouring more defensive miners such as Glencore PLC (LSE:GLEN) and Vale over their higher-risk peers.
Anglo American shares were down 1% on Wednesday at 2,448p, while Antofagasta's were off 0.75% at 1,676.5p.