LONDON -- Many mining stocks offer a great way to hitch on to the long-term uptrend in natural resources demand, which has been prompted by a rising global population and the rapidly expanding spending power of developing countries.

However, I reckon it could pay to steer clear of copper giant Antofagasta (LSE:ANTO) (NASDAQOTH:ANFGY), as escalating production costs over the long haul look set to stifle earnings.

Runaway costs
Antofagasta revealed the extent of the major structural costs it faces when the group released its 2012 production report during late January.

A multitude of problems are set to push costs at the company's aging Esperanza and Los Pelambres facilities higher this year, a phenomenon predicted by many to worsen over an extended time horizon.

The effect of lower 'by-product credits' owing to lower gold and molybdenum grades, higher electricity prices, rising treatment and refining charges, plus rising general inflation, are all likely to hasten negative earnings momentum.

Indeed, Antofagasta expected cash costs (excluding by-product credits) to rise 13.6% in 2013 to 185 U.S. cents per pound of copper produced.

Production cutbacks
An estimated fall in group production levels this year is exacerbating the issue of rising expenditure. The Chilean miner produced 709,600 tonnes of copper during 2012, up 10.8% from the previous year. Gold output rose by more than half to 299,900 ounces, while molybdenum production increased 23.2% to 12,200 tonnes.

But for 2013, copper output is forecast to slide to 700,000 tonnes, while by-product output is set to fall even more steeply -- gold and molybdenum production are forecast to slide to 260,000 ounces and 8,000 tonnes respectively.

Time to eke out a bargain?
Bucking the rally seen across the world's stock markets, Antofagasta's share price has dived since the start of the year and is currently down more than 14% from 2012's closing price.

However, the price will have to fall back a lot further before I'd leap in -- the global economic recovery remains on shaky ground, and consequently a punt on rising commodity prices boosting Antofagasta remains a gamble.

The company currently trades on a prospective P/E ratio of 12.7 for 2013, according to the City analyst consensus, which is forecast to rise to 13.4 the following year. A scant dividend yield of 2.7% this year, falling to 2.5% in 2014, gives further reason for income investors to hold on to their cash and seek opportunities elsewhere.

Canary in the mine
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Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool recommends Antofagasta. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.