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Chilean copper miner Antofagasta (ANFGF -5.3%) is downgraded to Sell from Neutral at UBS, where analyst Myles Allsop notes the stock has rallied with other global mining equities after Russia's invasion of Ukraine, but copper is among the commodities whose supply likely will be least disrupted by the war.
Allsop also says the magnitude of the planned tax increase in Chile remains unknown and has the potential to act as a negative catalyst for Antofagasta if changes resemble the latest proposals.
"The risks of higher taxation are no longer adequately discounted and the copper price is not sustainable, leaving the risk vs. reward skewed to the downside," the analyst writes.
Allsop also upgrades Rio Tinto (RIO +1.1%) to Neutral from Sell, saying the stock's near-term risk/reward has improved with iron ore and steel exports from Ukraine and Russia disrupted and China stepping up stimulus.
"The disruption of iron ore and steel exports from Ukraine and Russia, combined with stronger than expected data from China in Jan/Feb with the prospect of further easing to achieve ambitious growth targets, improves the risk/reward for the iron ore price over the next 12 months and in turn for Rio," Allsop writes.
MMG Ltd. this week received approval from the Peruvian government to expand its giant Las Bambas copper mine.