Antofagasta PLC (LSE:ANTO) led a broad market rally as diplomatic signals from Tehran ease fears of a prolonged conflict and higher energy costs.
The FTSE 100 climbed more than 170 points on Wednesday as mining stocks surged on cautious optimism that the US-Iran conflict may be moving toward a diplomatic resolution, with Brent crude falling below $100 a barrel for the first time in weeks.
Antofagasta, the FTSE 100 copper miner with operations in Chile, led the advance with a gain of 8%, with other major miners following close behind.
Anglo American was up 5% and Fresnillo, the silver specialist, rose 4.7% to feature high up on the Footsie leader board.
The catalyst was a statement by Iranian president Masoud Pezeshkian, who said his country had the "necessary will" to end hostilities with the United States and Israel, provided certain conditions are met.
The connection between an Iran ceasefire and copper miners is direct and material.
Analysts at Bloomberg Intelligence had warned that a prolonged conflict, with oil sustained above $150 a barrel and the Strait of Hormuz disrupted, could cut Antofagasta's earnings by as much as 32%, as higher energy and input costs squeezed margins and slower global growth weighed on copper demand.
The prospect of oil retreating, and global industrial activity recovering, reverses much of that calculus.
Copper, which is heavily used in construction, electric vehicles, and power infrastructure, is acutely sensitive to the global growth outlook, making miners like Antofagasta among the most exposed stocks in either direction to shifts in geopolitical sentiment.
However, investors are buying a signal that carries significant caveats.
Pezeshkian holds a subordinate role in a political system dominated by hardline clerics, and his comments came laden with conditions, including guarantees against a return to conflict that Tehran had already demanded in its response to Washington's 15-point peace framework last week.
The Islamic Revolutionary Guard Corps, meanwhile, has threatened to widen its retaliation to include US technology companies, a reminder that the path to any deal remains far from clear.