Demand for copper is outstripping supply

Profits in the six months to 30 June rose 44% to $739.5m (�405.9m) from $415.4m for the same period last year.

Commodity prices have soared across the board this year, fuelled by China's continuing rapid industrial growth.

Antofagasta has been the subject of takeover speculation since its largest shareholder, Chilean industrialist Andronico Luksic, died last month.

Volatility

Copper prices on the London Metal Exchange were about 17% higher in the first half of 2005 than in the same period last year.

ANTOFAGASTA HISTORY Established in 1888 to build a railway between Antofagasta in Chile and La Paz in Bolivia Bought by Luksic family in 1980 Diversified into mining in the 1980s See Antofagasta's share price

Analysts expect prices to moderate over the next year as output increases and more smelting capacity becomes available.

However, Antofagasta - which also has interests in finance and transport - said the market was still prone to volatility because of low inventory levels and the weak dollar.

"This is an excellent result for Antofagasta with a strong operating performance supported by high metal prices," Jean-Paul Luksic, the company's chairman, said of the results.

"Antofagasta should continue to benefit from current strength in metal prices."