ICSG Copper Surplus Forecast Challenges Bullish Near-Term Market Narrative

Copper

ICSG copper surplus forecast has shifted the refined copper market outlook from deficit to surplus, challenging the more bullish tone around copper prices and strategic demand. The International Copper Study Group now expects a refined copper surplus of 96,000t in 2026 and 377,000t in 2027.

The revision marks a major change from ICSG’s October outlook, which had projected a 150,000t deficit for 2026. The new ICSG copper surplus forecast reflects weaker-than-expected demand growth and stronger secondary refined copper output.

The refined copper market is still exposed to mine disruption, lower ore grades and geopolitical risk. However, the latest forecast suggests that scrap-based production and slower consumption can offset some of the tightness from constrained mine supply.

ICSG expects global adjusted mine production to reach 23.559mn t in 2026 and 24.103mn t in 2027. Adjusted refined production is forecast at 28.76mn t in 2026 and 29.613mn t in 2027, while refined usage is expected at 28.664mn t and 29.236mn t.

Secondary Output and Slower Demand Ease Refined Copper Tightness

The biggest change in the ICSG copper surplus forecast comes from the refined side of the market. Stronger secondary output is expected to help balance constrained primary supply.

Refined copper production is forecast to grow by only 0.4% in 2026 before rising by 3% in 2027. Constrained concentrate availability will limit primary electrolytic growth this year, but solvent extraction-electrowinning and scrap-based output should provide support.

For 2027, ICSG expects primary refined copper production to rise by 2.3%, while secondary refined production increases by 5.7%. This gives scrap a larger role in balancing the market.

This matters because copper supply discussions often focus heavily on mines. But refined copper availability also depends on scrap collection, processing economics, smelter operations, SX-EW output and regional refined production.

Demand growth has also been revised lower. ICSG now expects refined usage to increase by 1.6% in 2026, down from its previous 2.1% forecast.

The downgrade reflects uncertainty from the Middle East conflict and disrupted trade flows. Chinese refined copper usage is expected to rise by 1.9% in 2026, while demand outside China grows by 1.3%.

Global refined usage is forecast to rise by 2% in 2027. Asia will remain the main growth engine, while EU and Japanese consumption are expected to stay subdued.

Asia outside Asean and CIS states will remain by far the largest refined copper-consuming region. Usage is projected at 20.469mn t in 2026 and 20.907mn t in 2027.

Mine Supply Risks Still Support Copper’s Strategic Value

ICSG’s near-term surplus forecast does not remove copper’s longer-term supply risk. The group revised down its 2026 mine production growth forecast to 1.6% from 2.3%, citing weaker growth in the Democratic Republic of Congo, Chile and Indonesia.

Output at Grasberg in Indonesia and Kamoa in the DRC remains constrained after major incidents in 2025. These disruptions show how quickly copper mine supply can tighten when large assets underperform.

Mine production growth is expected to recover to 2.3% in 2027. ICSG expects support from Chile, Zambia, Indonesia and the DRC, along with ramp-ups at Oyu Tolgoi in Mongolia, Malmyz in Russia, Julong in China and Almalyk in Uzbekistan.

Still, mine supply remains structurally difficult. Declining ore grades, slow permitting, higher capital intensity and longer project timelines continue to limit how quickly the industry can respond to higher prices.

Copper demand also retains strong strategic drivers. Energy transition investment, grid expansion, urbanisation, digitalisation, data centres and new semi-finished product capacity should continue to support long-term consumption.

This creates a split market narrative. On paper, refined copper may move into surplus in 2026 and 2027. Strategically, copper remains central to electrification, artificial intelligence infrastructure, manufacturing and industrial policy.

ICSG also warned that actual balances could diverge from forecasts. Its Chinese apparent demand calculation excludes changes in unreported stocks, including State Reserve Bureau, producer, consumer, trader and bonded inventories.

That caveat is important. Copper inventories can move through hidden channels, making the refined market appear looser or tighter than reported balances suggest.

The ICSG copper surplus forecast therefore does not end the bullish long-term copper case. It does, however, caution against assuming immediate refined scarcity when secondary supply is rising and demand outside China remains soft.

The Metalnomist Commentary

The ICSG copper surplus forecast shows that copper’s strategic story and near-term balance sheet can move in different directions. Data centres, grids and electrification support the long-term thesis, but scrap growth and weaker demand may keep the refined market looser than bullish headlines suggest.

Paipote Copper Smelter Delay Pushes Chile’s Processing Expansion to 2031

Enami copper

Paipote copper smelter development in northern Chile is facing a delay of more than two years, pushing the country’s major state-backed smelting expansion further into the next decade. Chile’s national mining company Enami now expects construction of the $1.7bn project to begin in October and finish in February 2031.

The revised schedule replaces the earlier plan to start construction in February and complete the project by November 2028. The new dates were included in documents submitted to Chile’s environmental evaluation service, Sea.

Paipote copper smelter modernization is strategically important because Chile remains one of the world’s largest copper producers but has limited domestic smelting and refining capacity compared with its concentrate output. The delay extends the period in which more Chilean copper concentrate will continue to depend on overseas processing.

The project is designed to more than double smelting capacity at the Paipote metallurgical complex to 850,000 t/yr of copper concentrates. It will also include an electrolytic refinery capable of producing 240,000 t/yr of copper cathodes.

Engineering Changes Add Cost and Push Back Construction

The delay follows completion of detailed engineering studies for the smelter. Enami said the proposed changes to the original project, which was approved in October 2025, will cost $65mn.

The changes include demolition of existing infrastructure at the metallurgical complex. Some structures must be removed because of age, while others interfere with the new construction plan.

This is a common risk in brownfield metallurgical projects. Existing plants often provide strategic location and infrastructure advantages, but they can also create cost, demolition and layout challenges when new technology is added.

Enami’s filing seeks confirmation from Sea that the proposed changes do not need to be submitted to Chile’s environmental impact evaluation system. The outcome will matter for timing because any additional environmental review could further extend the project schedule.

The Paipote copper smelter delay also reflects the complexity of modern smelting projects. New plants must meet tighter environmental standards, handle higher concentrate volumes and integrate refining capacity while controlling emissions and operating costs.

For Enami, the project is more than a capacity expansion. The company suspended the existing smelter in 2024 to stem financial losses and improve environmental performance. The modernization is therefore intended to rebuild processing capability on a more sustainable and competitive basis.

Chile’s Copper Value Chain Remains Exposed to Processing Bottlenecks

The delay has wider implications for Chile’s copper value chain. Chile produces large volumes of copper concentrate, but domestic processing capacity has not expanded in line with mine output.

A larger Paipote complex would strengthen local copper concentrate processing and increase domestic cathode production. It would also support small- and medium-sized copper producers, which rely on Enami to process, smelt and refine their material.

That role is important for Chile’s mining structure. Major copper producers often have access to export markets and long-term concentrate buyers. Smaller producers depend more heavily on national processing infrastructure to convert output into marketable products.

The project’s planned 850,000 t/yr concentrate capacity would give Enami a much stronger position in Chilean smelting. The 240,000 t/yr cathode refinery would also help capture more value inside the country rather than exporting concentrate for overseas treatment.

However, the new 2031 completion date means these benefits will arrive later than planned. In the meantime, Chile remains more exposed to global treatment charges, overseas smelter availability and concentrate export logistics.

The delay also comes as copper demand is increasingly tied to grids, electrification, renewable energy, electric vehicles and industrial investment. Chile’s ability to capture more value from copper will depend not only on mine output, but also on smelting, refining and downstream processing capacity.

For Enami, execution will be critical. The company must manage engineering changes, environmental requirements, demolition, construction and financing while restoring confidence in Paipote’s long-term role.

For Chile, the project remains strategically necessary despite the delay. A modern Paipote copper smelter could improve domestic processing resilience and support a more integrated national copper industry.

The Metalnomist Commentary

The Paipote delay shows that copper resource leadership does not automatically translate into processing strength. Chile needs modern smelting and refining capacity to capture more value from its copper base, but brownfield execution risk remains a serious bottleneck.

KGHM Copper Production Fell in 2025 Despite Stronger Earnings

KGHM

KGHM copper production declined in 2025 after planned maintenance at the Glogow II smelter and refinery in Poland and the first-quarter sale of the McCreedy West mine in Canada. The group’s full-year payable copper output fell 3% on the year to 710,000t.

KGHM copper production was also affected by weaker performance at its North American assets. KGHM International produced 52,200t of payable copper in 2025, down 14% from the previous year, because of the McCreedy West sale, lower recovery rates, and lower copper content in feed.

The weaker KGHM copper production result was partly offset by stronger output from the Sierra Gorda mine in Chile. Payable copper attributable to KGHM’s 55% stake in Sierra Gorda rose 8% on the year to 86,800t, supported by higher copper grades and better recovery rates.

Polish Smelter Maintenance Weighed on Copper Output

KGHM’s Polish operations remained the group’s core production base in 2025. Electrolytic copper production from Polish assets fell 3% on the year to 570,900t because of planned maintenance at Glogow II.

Fourth-quarter electrolytic copper output in Poland rose 1.6% on the year to 149,000t, showing some recovery after maintenance-related disruption. Copper in concentrate from Polish assets totalled 401,100t for the full year, broadly flat compared with 2024.

The results show that KGHM’s Polish copper chain remains operationally stable, but smelter and refinery availability can still influence annual payable production. For European copper supply, this matters because domestic smelting and refining capacity is becoming increasingly strategic as concentrate markets tighten.

Sierra Gorda and Higher Prices Supported Financial Performance

Sierra Gorda delivered a stronger result in 2025 and helped offset weakness elsewhere in the portfolio. KGHM’s attributable copper output from the Chilean mine rose because of better ore grades and recovery rates, while fourth-quarter output increased 6% on the year to 21,900t.

The mine also strengthened KGHM’s by-product profile. Sierra Gorda produced 5mn lb, or 2.27mn kg, of molybdenum in 2025, up 53% from the previous year.

Despite lower copper production, KGHM’s financial performance improved. Group net profit rose 28% on the year to 3.7bn zlotys, while EBITDA increased 22% to 10.3bn zlotys. Stronger copper prices helped support earnings, with the three-month LME copper contract averaging $9,965/t in 2025, up 7% from the previous year.

The Metalnomist Commentary

KGHM’s 2025 results show that copper producers can still improve earnings even when output falls, if prices and asset mix move in their favour. The stronger Sierra Gorda contribution also underlines the value of higher-grade, internationally diversified copper assets.

Global Refined Copper Surplus Expands as Smelter Output Outpaces Demand

Copper

Global refined copper surplus widened sharply in 2025 as refined production grew faster than consumption despite persistent mine disruptions. The International Copper Study Group reported a preliminary surplus of 380,000t, up from 69,000t in 2024, signaling a looser refined market balance than many copper buyers expected.

The global refined copper surplus reached 437,000t after adjusting for estimated changes in Chinese bonded stocks. This reflected strong refined production growth, particularly in China and the Democratic Republic of Congo, even as mine supply growth remained constrained by operational incidents, lower grades, and major disruptions at key assets.

World refined copper production rose by 4.2pc to 28.54mn t in 2025. Primary output increased by 3.9pc, while secondary production from scrap rose by 5.8pc. The expansion shows that smelting, refining, and recycling capacity can continue lifting refined supply even when mine growth remains limited.

China and the DRC Drive Refined Copper Output Growth

China and the DRC were the main drivers of refined copper production growth in 2025. Together, they account for around 57pc of global refined output and recorded combined growth of about 9pc. Excluding these two countries, world refined production fell by around 1.8pc, showing how concentrated refined copper growth has become.

Asia outside China faced weaker production. Output fell by 3.7pc as maintenance shutdowns in Japan reduced the country’s production by 8.2pc and the Pasar refinery in the Philippines closed. Indonesia added new capacity through the Amman and Manyar smelters, but operational issues and disruptions linked to Grasberg limited the impact.

Chile also weighed on refined supply outside the main growth centres. Refined copper production fell by 10pc, with electrolytic output from concentrates down 16pc amid maintenance shutdowns. SX-EW production also declined by 6.8pc, reinforcing the pressure on one of the world’s most important copper-producing countries.

Mine Disruptions Keep Supply Risk Alive Despite Higher Inventories

Mine production increased by only around 1pc to 23.13mn t in 2025. Concentrate output was broadly flat, while SX-EW output rose by 3pc. New projects supported growth, but lower grades and operational disruptions prevented a stronger mine-side recovery.

Major incidents at Kamoa and Grasberg were especially important. Kamoa’s output fell after a seismic incident, while Indonesian mine production dropped by around 43pc because of lower Batu Hijau output, Grasberg maintenance, and the mud rush incident at Grasberg. These events show why copper supply risk remains high even when refined inventories are rising.

Consumption also grew, but not fast enough to absorb new refined supply. World apparent refined copper usage rose by about 3pc to 28.16mn t. Chinese apparent demand increased by around 4pc, but net refined imports fell by 15pc as imports declined and exports jumped. Outside China, growth in parts of Asia, the Middle East, and north Africa offset weakness in the EU and Japan.

The global refined copper surplus became more visible late in the year. December refined production reached 2.43mn t, while usage was 2.26mn t, creating a monthly surplus of 173,000t. Global refined stocks rose to 1.776mn t at year-end, while exchange stocks at the LME, Comex, and SHFE reached 933,641t at the end of January 2026, the highest level since September 2003.

The Metalnomist Commentary

The global refined copper surplus does not remove copper’s long-term supply challenge, but it changes the near-term market psychology. Copper now faces a split reality: refined metal looks looser, while mine disruptions still threaten the concentrate pipeline behind future supply.

Chile copper smelter upgrade set to transform Paipote complex

Chile Copper Smelter

The Chile copper smelter upgrade at Enami’s Paipote complex is moving a step closer to reality as regulators signal support for the $1.7bn project. Chile’s environmental impact service SEA has recommended approval, with the Atacama region’s environmental commission scheduled to vote on 29 October. This Chile copper smelter upgrade would modernise a 1950s-era facility, strengthen support for small and mid-scale miners and align Chile’s copper refining base with stricter environmental standards.

The Paipote metallurgical complex currently processes regional ores for Chile’s numerous small and medium miners, but it has struggled with financial losses and environmental compliance. Enami temporarily closed the smelter in 2024 to address these issues. As a result, the Chile copper smelter upgrade proposal combines capacity growth with cleaner technology, positioning the Atacama facility as a more competitive and sustainable processing hub in the world’s largest copper-producing nation.

Chile copper smelter upgrade doubles capacity and adds refinery

Under the plan, the Chile copper smelter upgrade will more than double Paipote’s processing capacity to 850,000 t/yr of copper concentrates. The project will also add an electrolytic refinery capable of producing 240,000 t/yr of copper cathodes, allowing more value to be captured domestically instead of exporting concentrates. Beyond copper, the upgraded plant will process anode sludge to recover palladium, tellurium, selenium, platinum, silver and gold, deepening Chile’s exposure to high-value minor metals markets.

Enami has already received over 15 expressions of interest from banks, funds, miners and traders to finance the project through offtake-based structures. The Chile copper smelter upgrade therefore sits at the intersection of industrial policy and commercial appetite, using future production to unlock capital today. Technically, the project will install a new bottom-blowing reactor and continuous converting technology designed to lift captured emissions from around 95pc to 99pc, an important step in reducing the plant’s environmental footprint in the Atacama region.

The Metalnomist Commentary

If approved, Paipote’s modernisation would mark a significant reinforcement of Chile’s mid-tier copper processing base, particularly for smaller miners that rely on Enami’s infrastructure. The Chile copper smelter upgrade also illustrates how global copper leaders are using brownfield assets to deliver both higher ESG performance and more refined output. For traders and investors, the project underscores a broader trend: future copper supply security will increasingly depend on environmentally upgraded smelters, not just on new mines.

BHP copper investment strengthens South Australian smelting hub

BHP

BHP copper investment at the Olympic Dam complex marks a decisive bet on South Australia as a long-term copper hub. The BHP copper investment totals $555mn and targets higher smelter performance and processing capability ahead of a larger expansion decision due in 2028. As a result, the BHP copper investment positions Olympic Dam to offset declining grades in South America and keep overall group copper output within its strategic range.

BHP copper investment prepares Olympic Dam for future expansion

BHP copper investment will fund several debottlenecking projects rather than one single mega-upgrade. The package includes a new oxygen plant that should raise copper concentrate smelting rates to 85 t/hour from 80 t/hour. It also funds an expansion of the underground electric rail network to 6km from 4.85km, supported by six new locomotives. These incremental changes increase throughput and logistics efficiency while keeping optionality ahead of a delayed multi-billion-dollar smelter and refinery expansion decision. Meanwhile, Olympic Dam acts as the processing backbone for Prominent Hill and Carrapateena, which both feed the centralised smelter and refinery. BHP expects combined South Australian copper production of 310,000-340,000t in the 2025-26 financial year, reinforcing the region’s growing share of group copper output.

Australian copper pivots as South American grades decline

BHP copper investment in South Australia comes as its South American assets face medium-term headwinds. The company has already signalled that copper output from Chile and Brazil will decline over time, with Escondida expected to fall to 900,000-1mn t/yr by 2030. Therefore, strengthening Olympic Dam, Prominent Hill and Carrapateena is essential to stabilise portfolio volume and preserve market share. However, BHP still faces structural challenges around high construction and energy costs for domestic smelting. To mitigate this, it has signed two renewable power purchase agreements with Neoen, which should cover around 70pc of its copper-related electricity needs in South Australia by 2030. These contracts help manage operating costs while supporting decarbonisation commitments. BHP produced a record 2mn t of copper in 2024-25, up 8.1pc year on year, and plans to maintain production within a 1.8mn-2mn t range in 2025-26.

The Metalnomist Commentary

BHP copper investment at Olympic Dam underlines how major miners now use incremental debottlenecking to bridge toward larger capex decisions. By lifting smelter performance and securing renewable power, BHP is quietly repositioning South Australia as a core copper processing hub as Escondida and other South American assets mature. For downstream users, this shift supports more diversified copper supply but will also tie long-term availability to Australia’s energy and project-cost trajectory.

ICSG copper market surplus narrows, but inventories shift to the US

ICSG

The ICSG copper market surplus reached 251,000t in 1H 2025. This ICSG copper market surplus narrowed from 395,000t last year. However, refined output and inventory dynamics still temper tightness signals.

Supply lifted by Peru and the DRC, while Indonesia lags

Global mine output rose by 2.7pc on stronger runs at Las Bambas and Toromocho. Meanwhile, the DRC grew 9.5pc, led by Kamoa and TFM/KFM. Mongolia advanced 31pc on the Oyu Tolgoi ramp-up. However, Indonesian output fell 36pc on weaker Grasberg and Batu Hijau. Chile gained 2.6pc despite drops at Collahuasi and Los Pelambres.

Refined production increased 3.6pc, driven by China and the DRC. Outside these two, refined output rose just 0.6pc. Chilean refined production fell 8.4pc amid smelter shutdowns. Meanwhile, secondary refined output rose 3.7pc, as Chinese scrap use strengthened. Therefore, the ICSG copper market surplus narrowed but persisted.

Demand concentrated in China as inventories migrate to Comex

Refined usage climbed 4.8pc in January–June. Chinese demand rose 7.5pc, lifting its share to 58pc. However, China’s net imports fell 2.6pc, reflecting stronger domestic supply. Consumption outside China grew 1pc, with Asia, MENA gains offsetting EU, Japan, and US declines.

Exchange inventories totaled 450,752t at July end, up 4.8pc from December. LME stocks fell 129,600t, while SHFE was unchanged. However, Comex inventories rose 150,873t, as metal shifted to the US on tariff concerns. The July LME cash price averaged $9,778/t, down 0.6pc month on month. The 2025 high was $10,120/t on 3 July; the low was $8,539/t on 9 April. As a result, the ICSG copper market surplus coexists with firm price support near $10,000/t.

The Metalnomist Commentary

This print confirms a market in balance rather than deficit. Watch Comex inflows, Chilean smelter uptime, and Indonesia’s recovery for price direction. A decisive break higher likely needs sustained stock draws, not just mine-side headlines.

Copper Rally Near Its Peak: Goldman Sachs Sees Sentiment Outrunning Fundamentals

Goldman Sachs

Copper rally near its peak now reflects stretched positioning more than tightening supply. Copper rally near its peak follows record prices above $11,200/t this week. Copper rally near its peak should fade toward a $10,000–11,000/t range, Goldman Sachs says.

Copper’s latest spike was driven by bullish sentiment and a softer dollar. However, Goldman argues fundamentals do not justify a lasting breakout. The bank highlights a modest surplus in the physical market today. Therefore, it expects consolidation as speculative flows recede. Investors should watch inventories and import premiums closely.

Goldman still sees solid support around $10,000–11,000/t. The range reflects firm demand outside the US and improving China views. However, any surge above that band should be short-lived. Positioning is “stretched” at the five-year 99th percentile on LME. As a result, tactical risk increases for long positions.

Visible inventories have risen by about 700,000t this year. The stock build is led by regions outside the US. Meanwhile, the market sits in a visible surplus near 400,000t year to date. Therefore, price gains lack confirmation from stock draws. History shows rallies fade without inventory tightness.

Mine disruptions amplified the bullish narrative this quarter. Headlines from Grasberg, El Teniente, and Kamoa-Kakula lifted sentiment. However, Goldman estimates net tightening is smaller than headlines suggest. Disrupted capacity near 700,000 t/yr nets to ~200,000t by 2026. Allowances and recoveries offset a large portion of losses.

Chinese demand signals have cooled from mid-year highs. China’s apparent consumption fell 2% year over year in September. Earlier quarters posted stronger gains near 15%. Meanwhile, cathode import premiums moderated to ~$40/t. Premiums remain positive but down from May’s $110/t. Therefore, China’s impulse looks mixed near term.

Speculative behavior mirrors the 2024 pattern. A softer dollar and outages pulled investors back in. Open interest on Comex remains below 2024 peaks. That leaves some room for additional inflows. However, Goldman expects any extra push to be brief. Positioning could unwind as data confirm surplus.

Global refined output has grown by 4% year to date. Output may dip about 2% year over year in the fourth quarter. Weakness in Chile contrasts with growth in the DRC. DRC refined production rose 13% year over year in July. Higher prices also mobilized more global scrap supply. Consequently, refined availability remains resilient.

Goldman raised its 2026 copper forecast to $10,500/t. The revision acknowledges tighter balances than previously expected. However, the bank still sees a modest surplus then. Prices should hover inside $10,000–11,000/t through early 2026. As speculative length fades, momentum should normalize. Therefore, risk-reward now favors patience and discipline.

Macro factors still matter for near-term volatility. A weaker dollar could extend the rally temporarily. Comex-LME arbitrage may pull metal into the US. Additional inflows could lift prices above current highs. However, Goldman expects reversals as positioning normalizes. Without stock declines, new records appear fragile.

Producers should manage hedging with measured triggers. Buyers should ladder coverage while spreads remain favorable. Traders should track China semis shipments and SHFE-LME signals. Meanwhile, watch smelter maintenance and TC/RCs for tightness cues. Ultimately, inventory trends will confirm or deny the squeeze story.

Positioning, Inventories, and Supply: Why the Peak Looks Close

Goldman’s thesis rests on stretched investor positioning today. LME exposure stands near the five-year 99th percentile. Therefore, marginal buyers face crowding risk. Visible inventories continue to climb across key hubs. Stock builds contradict a classic shortage narrative. As a result, upside looks increasingly tactical.

Supply disruptions appear less binding than headlines imply. Net tightening to 2026 balances is near 200,000t. Allowances, ramp-ups, and recoveries offset outages. Refined output growth cushions temporary shortfalls. Scrap flows add elasticity as prices rise. Therefore, sustained deficit claims seem premature.

China’s Demand Pulse and Price Path into 2026

China remains the largest swing factor for copper demand. Recent data show a moderation from mid-year strength. Import premiums eased, signaling reduced physical tightness. Ex-China semis shipments have been flat since March. Therefore, the near-term demand impulse looks softer.

Goldman’s base case anchors prices inside $10,000–11,000/t. Short-term spikes may occur on fresh inflows. However, medium-term prices should revert as length unwinds. Inventories and spreads will guide that reversion timing. Consequently, 2026 averages near $10,500/t look reasonable.

The Metalnomist Commentary

Positioning, not panic scarcity, explains the latest leg higher. Unless visible stocks fall decisively, momentum should cool into 2026. We would fade extreme strength and favor range strategies around $10,000–11,000/t.

Codelco Lowers 2025 Copper Guidance at El Teniente

Codelco mine

Codelco lowers 2025 copper guidance at El Teniente after a fatal seismic incident. The pause removed 33,000t from output and lifted losses to $340mn. Therefore, Codelco lowers 2025 copper guidance at El Teniente as damaged sectors remain offline. Guidance updates will follow in the coming days.

Operations are only partly restored while several zones stay halted. Recursos Norte, Andesita, Andes Norte, and Diamante face structural damage. Meanwhile, ore movements resumed, with 76,400t sent to Colon and 9,900t to Sewell. As a result, Codelco lowers 2025 copper guidance at El Teniente despite incremental throughput.

Safety, Timeline, and Production Impact

The incident occurred on 31 July after an earthquake triggered a rockfall. Six workers tragically lost their lives in the Andesita region. The mine is the world’s largest underground copper operation. However, full-area inspections continue to constrain mining fronts. Therefore, 2025 guidance must reflect narrower access and slower sequencing.

Market Implications and Near-Term Priorities

Copper supply risk rises as Chile’s flagship asset pares plans. Price effects hinge on the duration of sector closures and mill feed. Codelco prioritizes geotechnical remediation and safe restart protocols. As a result, near-term volumes rely on alternative stopes and stockpiles. Investors should track repair milestones and concentrator stability.

The Metalnomist Commentary

This cut reinforces how geotechnical shocks can reshape copper balance sheets fast. Expect tighter Chilean guidance until remediation unlocks high-grade panels. Watch repair cadence, dilution control, and smelter feed quality into 2025.

BHP Domestic Copper Investment Shifts Focus Back to Australia

BHP

BHP domestic copper investment will rise as the company pivots to Australia. BHP domestic copper investment offsets medium-term grade declines in Chile and Brazil. Therefore, BHP domestic copper investment targets new smelting capacity and mine upgrades in South Australia. Pampa Norte output will ease to 235,000 t/yr in the medium term. Escondida will trend toward 900,000–1,000,000 t/yr by 2030. Management is also evaluating debottlenecking and sulphide leaching options.

Australian smelting plans advance while South American grades fall

BHP plans a two-phase South Australian investment program. The first phase would lift smelting to 1.1–1.4mn t/yr of concentrate. An investment decision is now slated for 2028. The plan includes expansions at Olympic Dam and Carrapateena. However, Australian energy and construction costs remain challenging. Even so, domestic smelting would improve supply security and value capture.

Chilean portfolio resets with debottlenecking and leaching options

Pampa Norte guidance falls from 268,000 t in FY24–25. It sits at the low end of 230,000–250,000 t for FY25–26. BHP is assessing concentrator debottlenecking for a 2027 decision. It may restart Cerro Colorado using sulphide leaching. Meanwhile, Escondida declines with lower feed grades. Output moves to 900,000–1,000,000 t/yr to 2030. Regional peers also flag cost pressures on processing.

The Metalnomist Commentary

BHP’s pivot hedges grade risk with domestic integration, but cost inflation is real. Watch the 2028 smelter decision, leaching pilots at Cerro Colorado, and debottlenecking returns at Pampa Norte.

Enami Copper Smelter Restart Seeks $1.7bn and Offers Cathode Offtake

Enami Copper

Enami copper smelter restart moves forward with a $1.7bn investment plan. The state miner will offer long-term copper cathode offtake to investors. The Enami copper smelter restart centers on the Hernan Videla Lira complex in Chile’s Atacama region.

From smelter to metallurgical complex

Enami copper smelter restart aims to transform Hernan Videla Lira into a full metallurgical complex. The project includes a smelter sized for 850,000 t/yr of copper concentrate. It also includes an electrolytic refinery designed for 240,000 t/yr of copper cathode. Enami created Proyecta Enami to design, build, and commission the complex. Financing will hinge on long-term cathode supply agreements.

Timing uncertain, strategic value clear

The Paipote facility shut in February 2024 after supplier payment challenges. No official restart date has been set by Enami. However, this is Chile’s only active smelting-and-refining development today. The upgrade could lift domestic value-addition and secure cathode supply. It may also support small and midsize miners that sell concentrate locally.

The Metalnomist Commentary

Investor interest will track offtake terms, capital phasing, and EPC execution risk. If financing closes, Chile strengthens midstream capacity as global concentrates tighten. Watch for clarity on ramp-up schedule, feed mix, and working capital needs.

Climate risk to copper threatens chip supply

Pricewater house Coopers

Risk concentration and timelines

Climate risk to copper threatens chip supply by 2035, PwC warns. Climate risk to copper could disrupt one-third of global semiconductors. Climate risk to copper stems from drought and extreme weather at key mines. By 2035, 32% of chip production will rely on at-risk copper. By 2050, exposure could rise to 58% without adaptation.

Chile’s exposure underscores the systemic risk to copper supply. Today, one quarter of Chilean copper faces drought disruption. Within a decade, that share could reach 75% of output. By 2050, the risk could span 90–100% of production. Therefore, global chipmakers inherit Chile’s water stress through copper inputs.

Most copper-supplying countries will face drought risk by 2035. The risk set includes the majority of 17 key producers. As a result, single-region sourcing will amplify volatility. Hence, procurement planning must assume multi-year water shocks.

Mitigation strategies and industry responses

Miners are deploying desalination and water recycling to reduce risk. Several Chilean operations already pipe desalinated water to site. However, these projects require large capital and reliable power. Therefore, build-out speed may lag rising climate pressures.

Downstream buyers must diversify copper inputs and forms. Smelter contracts should include climate and water performance clauses. Meanwhile, scrap utilization can buffer refined copper tightness. As a result, OEMs can temper risk to chip supply chains.

Technology choices can also ease the risk to copper exposure. Closed-loop water systems lower fresh-water dependence at plants. Dry-stack tailings reduce evaporation and seepage losses. Therefore, integrated ESG and engineering plans become commercial necessities.

The Metalnomist Commentary

Climate risk is now a fundamental copper cost and availability driver. The winners will pre-finance water resilience and lock diversified supply. Expect copper contract structures to price water risk more explicitly.

KGHM Copper Production Falls 6% in Q1 Despite Strong Pricing Environment

KGHM

KGHM copper production declined 6% year-over-year to 169,000 tonnes in the first quarter as planned maintenance shutdowns and asset divestments offset operational improvements. The Polish copper producer faced reduced output from planned maintenance at its Glogow II smelter and the February sale of Canada's McCreedy West mine. However, KGHM copper production remained aligned with company budget targets while benefiting from stronger copper prices and diversified sales strategies across global markets.

Polish Operations Maintain Stability Amid Planned Maintenance Activities

KGHM's Polish assets delivered consistent performance with 99,400 tonnes of copper concentrate production and 134,000 tonnes of electrolytic copper output during the quarter. These production levels met company targets despite the scheduled maintenance shutdown at the Glogow II smelter facility. Meanwhile, the company's Polish operations continue serving as the backbone of overall production capacity and revenue generation.

The planned maintenance activities demonstrated KGHM's commitment to operational excellence and long-term asset sustainability. These scheduled shutdowns ensure optimal equipment performance and safety standards across the Polish mining complex. Therefore, the temporary production impact reflects strategic maintenance planning rather than operational challenges or market-driven constraints.

International Assets Show Mixed Performance Across Geographic Regions

Sierra Gorda mine in Chile delivered exceptional performance with 20,800 tonnes of copper production, representing a 22% increase from the previous year. KGHM holds a 55% ownership stake in this strategic Chilean asset, which benefited from higher ore grades and improved recovery rates. As a result, Sierra Gorda's strong performance partially offset production declines from other international operations.

KGHM International assets in North America experienced contrasting results, with production falling 10% to 14,400 tonnes due to strategic portfolio changes. The February sale of Canada's McCreedy West mine removed production capacity while lower recovery rates at the US Robinson mine further reduced output. However, these international operations remain important components of KGHM's geographic diversification strategy.

Revenue performance demonstrated resilience despite lower production volumes, rising 8% to 8.9 billion zlotys ($2.35 billion) through the quarter. The three-month LME copper contract averaged $9,411 per tonne, significantly higher than the $8,537 per tonne recorded in the previous year. Consequently, strong copper pricing compensated for production declines while supporting overall financial performance and investment capacity.

The Metalnomist Commentary

KGHM's Q1 results highlight the copper industry's current dynamics where strong pricing environments can offset temporary production challenges from maintenance and portfolio optimization. The company's planned 3.8 billion zloty investment program for 2025, focusing on underground development and shaft sinking, positions KGHM for long-term growth despite near-term production volatility from operational and strategic factors.

Codelco Teams Up with Rio Tinto and BHP to Boost Chile Copper Exploration

Codelco

Strategic Copper Partnerships Target Atacama and Antofagasta Regions

Codelco has partnered with Rio Tinto and BHP to expand copper exploration in Chile, strengthening its role in the global copper supply chain. These two separate strategic deals target the Atacama and Antofagasta regions — two of the world’s most copper-rich zones — and reflect increasing investment in high-potential, underexplored areas.

Codelco and Rio Tinto formed a joint venture to explore the Nuevo Cobre region in the Atacama Desert, where Rio Tinto holds a 57.7% stake and Codelco 42.2%. The collaboration focuses on mineral extraction around the Potrerillos smelter and San Antonio property. Over the next 12 months, both parties will co-finance technical studies and business plans, with an option to extend the partnership timeline.

BHP Commits $40 Million to Study Codelco Sites

In a separate agreement, Codelco granted exclusive exploration rights to BHP for 34 properties in the Antofagasta region, including the early-stage Anillo project, which spans over 59,000 acres. BHP will invest up to $40 million to assess the copper potential of these sites.

If BHP deems the project commercially viable, it will partner with Codelco to move forward with development. Otherwise, all research and data generated during the study period will revert to Codelco. This structure enables Codelco to retain strategic optionality while leveraging private-sector exploration capital.

Chile Reinforces Global Copper Leadership Through Collaboration

These agreements signal a new era of public-private collaboration in Chile’s mining sector, with Codelco leveraging global mining majors to accelerate exploration. The deals also highlight the growing urgency to secure future copper supply amid rising demand from clean energy infrastructure and electric vehicles.

As the world’s largest copper producer, Chile remains critical to global decarbonization goals. These joint efforts aim to unlock new deposits and ensure a stable, diversified copper pipeline for the decade ahead.

The Metalnomist Commentary

Codelco’s dual alliances with Rio Tinto and BHP represent a strategic blueprint for unlocking untapped copper resources while sharing risk. With global copper supply tightening, such partnerships are essential to ensuring long-term mineral security — especially in geopolitically stable, resource-rich countries like Chile.

Rio Tinto Boosts Global Copper and Aluminium Output in Early 2025

Rio Tinto Mining

Amrun Bauxite and Alumina Operations Drive Growth

Rio Tinto increased its global copper and aluminium output in the first quarter of 2025. The UK-Australian producer reported 15mn tonnes of bauxite and 1.9mn tonnes of alumina production from January to March, up 12pc and 3pc year-on-year respectively.

Meanwhile, its Amrun bauxite mine in Queensland exceeded nameplate capacity. Alumina output also rebounded from prior gas supply disruptions. Despite global supply headwinds, Rio Tinto maintained its full-year guidance for all major commodities including 3.25mn–3.45mn tonnes of aluminium and up to 850,000 tonnes of copper.

Aluminium Output Stable Amid Energy Constraints

Rio Tinto’s aluminium production remained flat year-on-year. Its Tiwai Point smelter in New Zealand operated at reduced capacity due to a request from Meridian Energy. However, a production ramp-up is scheduled for late August.

At the same time, the Kitimat smelter in Canada faced energy supply issues that limited further growth. While the US announced new tariffs on aluminium and steel in March, Rio Tinto confirmed minimal short-term shipment impact. Yet, long-term consequences remain uncertain for its Australian smelters.

Copper Output Rises Despite Refining Cuts

Copper output rose across Rio Tinto’s operations in Utah, Chile, and Mongolia. However, refining volumes declined by 10pc owing to depleted stockpiles and technical issues at Utah’s Kennecott site.

As a result, Rio Tinto is expanding the Kennecott mine with a new underground section. The North Rim Skarn, initially scheduled for 2024, will now start operations in the second half of 2025 and is expected to boost copper capacity by 250,000 t/yr.

 

The Metalnomist Commentary

Rio Tinto’s Q1 output results suggest strong upstream resilience, especially in bauxite. However, energy access and refining disruptions remain critical variables. The success of Kennecott’s expansion will be key to meeting 2025 copper targets.

Freeport-McMoRan Forecasts Lower Copper Sales, Higher Molybdenum Sales in 2025

Freeport-McMoran

Copper Sales Decline Amid Export Restrictions and Shipment Timing

US mining giant Freeport-McMoRan expects lower copper sales in 2025, projecting 4 billion pounds (1.79 million metric tons), down from 4.07 billion pounds in 2024. The company's fourth-quarter copper sales fell to 992 million pounds, reflecting lower ore grades and shipment timing.

Copper production remained stable at 4.21 billion pounds in 2024, with Q4 output dropping slightly to 1.04 billion pounds. Average realized copper prices rose to $4.21/lb in 2024, marking a $0.36/lb increase from 2023.

Molybdenum Sales and Production Outlook

Freeport expects to sell 88 million pounds of molybdenum in 2025, following a 3-million-pound drop in 2024 sales to 78 million pounds. Molybdenum production slipped to 80 million pounds in 2024, though Q4 production increased to 22 million pounds.

The average molybdenum price fell by $2.87/lb to $21.77/lb in 2024, despite a Q4 price increase to $22.23/lb.

Indonesian Operations and Export Challenges

Indonesia's copper production in Q4 2024 dropped 60 million pounds year-over-year to 429 million pounds. Despite this, annual production increased to 1.8 billion pounds, up from 1.66 billion pounds in 2023. Indonesia banned copper concentrate exports from January 1, but Freeport has requested an exemption until its fire-damaged smelter is repaired by mid-2025.

Expansion Plans in North and South America

In North America, Q4 copper production increased slightly to 321 million pounds, while South America saw a 5-million-pound increase to 291 million pounds. For 2024, total production fell in both regions.

Freeport is evaluating a 200-250 million lb/year expansion at its Bagdad mining complex in Arizona, requiring copper prices between $3.50-4.00/lb to justify the $3.5 billion investment. The company is also considering expansions at Safford/Lone Star in Arizona and a new mill project in Chile, with feasibility studies underway.

South32 Maintains 2024-25 Production Guidance, Excluding Mozal Aluminium

South32

Diversified Miner Reports Stable Output Across Key Assets

South32 has reaffirmed its 2024-25 production guidance for most of its operations, excluding Mozal Aluminium in Mozambique due to transportation disruptions from civil unrest. The Australian-based miner continues to ramp up production across its aluminium, copper, nickel, zinc, and manganese operations despite regional challenges.

Mozal Aluminium Faces Uncertainty Amid Civil Unrest

South32’s Mozal Aluminium smelter produced 90,000 tonnes of aluminium in Q4 2024, marking a 2.3% increase from the previous quarter. However, ongoing violent protests in Mozambique have led to the withdrawal of production guidance. While production and exports remain operational, raw material transportation remains disrupted.

Aluminium and Alumina Production Remains Strong

• Brazil Aluminium (40% South32 ownership): Q4 2024 output increased 13% quarter-over-quarter to 34,000 tonnes. Production guidance remains 130,000 t/yr.
• Hillside Aluminium (South Africa, 100% ownership): Production remained steady at 182,000 tonnes, with guidance unchanged at 720,000 t/yr.
• Brazil Alumina (36% South32 ownership): Q4 2024 production rose 4.2% to 348,000 tonnes, with guidance steady at 1.35 million t/yr.
• Worsley Alumina (Western Australia, 86% ownership): Production surged 18% to 1 million tonnes after maintenance, with 2024-25 guidance at 3.75 million t/yr.

Copper, Zinc, Nickel, and Manganese Performance

• Sierra Gorda Copper Mine (Chile, 45% ownership): Payable copper production rose 10% to 24,300 tonnes due to higher grades and improved molybdenum recovery. Guidance remains 84,800 t/yr.
• Cannington Zinc Mine (Australia, 100% ownership): Zinc output surged 50% to 79,200 tonnes, driven by higher plant throughput and improved silver and lead grades. Guidance holds at 265,400 t/yr.
• Cerro Matoso Nickel Mine (Colombia, 99.9% ownership): Nickel production rose 15% to 9,900 tonnes with improved plant utilization. Guidance remains 35,000 t/yr.
• Gemco Manganese Mine (Australia, 60% ownership): Production resumed after Cyclone Megan, reaching 639,000 tonnes.
• Hotazel Manganese Mine (South Africa, 54.6% ownership): Output declined 19% to 485,000 tonnes due to a temporary shutdown at Wessels mine.

Green Aluminium Incentives and Industry Outlook

The Australian government has pledged A$2 billion in production credits to support aluminium producers transitioning to renewable energy by 2036. The Green Aluminium Production Credit will be available from 2028-29 for up to 10 years, though specific details remain undisclosed.

South32’s production stability, despite regional disruptions, positions it strongly within the evolving global metals market.

Freeport-McMoRan Plans Copper Mine Expansions in Arizona and Chile

Freeport-McMoRan Copper

Freeport-McMoRan, the Arizona-based mining giant, has announced ambitious plans to expand its copper mining operations to meet the rising demand for the metal, particularly driven by electric vehicle (EV) production and infrastructure development. The company outlined key projects in Arizona and Chile slated for 2025 and beyond.

Expansion Projects in Arizona and Chile

• Bagdad Mine (Arizona): Freeport plans to double the concentrator capacity of the Bagdad mine to produce 200–250 million lbs of copper annually. It is set to become the first Freeport mine with a fully autonomous haulage system, transitioning its fleet to 100% automation.
• Lonestar/Safford Mine (Arizona): Exploration studies are ongoing, with results expected by late 2024. This could pave the way for significant capacity increases.
• El Abra Mine (Chile): An expansion at the El Abra site is under review, with environmental impact studies scheduled for submission by the end of 2025.

Copper Production Trends and Market Dynamics

In the third quarter, Freeport's copper production fell 3% year-on-year to 1.05 billion lbs, but year-to-date production remains up by 1.8% at 3.17 billion lbs. Consolidated molybdenum production for the quarter was steady at 20 million lbs, though year-to-date figures are down 6% to 58 million lbs.

Despite the mixed production figures, copper prices averaged $4.32/lb during the quarter, a notable increase from $3.86/lb in the previous year, bolstering revenues.

Regional Production Overview

1. North America: Copper production dropped by 9% to 313 million lbs due to lower ore grades and operating rates, with the Morenci joint venture experiencing the most significant decline. However, molybdenum production in the region rose by 14% to 8 million lbs.
2. South America: Copper output decreased by 2% to 299 million lbs, largely attributed to shipment timing and reduced output at Cerro Verde.
3. Indonesia: Copper production rose by 0.7% to 439 million lbs. However, a fire at the Manyar smelter in October may impact fourth-quarter figures.

Financial Performance

Freeport reported a quarterly profit of $526 million, up from $454 million a year ago, supported by a revenue increase to $6.8 billion from $5.8 billion.

Demand Outlook

Freeport is cautiously optimistic about the future of copper demand, citing:

• Increased EV-related demand from China, supported by anticipated government stimulus.
• Balanced US demand with strong performance in power cable and building wire markets offsetting weaknesses in residential and auto sectors.

With these expansions, Freeport-McMoRan is positioning itself to capitalize on growing copper demand while navigating regional production challenges.

Rio Tinto’s 3Q Copper and Aluminium Production Declines, Bauxite Output Rises

Rio Tinto’s

Rio Tinto, the UK-Australian mining giant, posted moderate declines in mined copper and primary aluminium production in the third quarter of 2024. However, the company saw overall output growth during the first nine months of the year.

Copper Production Declines Amid Challenges at Key Mines

In the third quarter, Rio Tinto’s mined copper production dropped by 1% year-on-year, reaching 167,800 tonnes. This decline was largely due to a significant 44% decrease at the Kennecott mine in the United States, where geological issues, including ground movement, restricted access to high-grade ore, forcing the use of lower-grade material. However, the company’s Escondida mine in Chile showed a 15% increase in output, driven by higher ore grades, and Oyu Tolgoi in Mongolia experienced a 19% production boost due to increased operational efficiency.

For the first nine months of 2024, Rio Tinto's mined copper production increased by 8% year-on-year, totalling 494,700 tonnes. Meanwhile, refined copper production surged by 59% in Q3, reaching 54,300 tonnes, thanks to a 129% increase at Kennecott following its smelter and refinery rebuild in the previous quarter. This was partially offset by a 24% drop in Escondida’s refined copper output due to lower ore grades. Overall, Rio Tinto’s refined copper production for January-September was up by 39% to 179,600 tonnes.

Aluminium Production Experiences Setbacks

Rio Tinto's primary aluminium production in Q3 fell by 2% year-on-year to 809,000 tonnes. This also represented a 2% drop from the previous quarter. However, aluminium production for the first nine months of 2024 was up by 1%, totalling 2.46 million tonnes. The decline in Q3 was linked to operational issues at the New Zealand Aluminium Smelters subsidiary, where Meridian Energy halted plans for a 600 MW renewable hydrogen and ammonia project due to economic and logistical challenges. As a result, the company expects to ramp up the smelter at Tiwai Peninsula in New Zealand by the second quarter of 2025.

Rio Tinto is also focusing on sustainability. In August 2024, Rio Tinto entered a partnership with the Queensland state government in Australia to ensure the long-term future of its Boyne smelter by transitioning to renewable energy sources.

Bauxite Production Shows Growth

Bauxite production, another key commodity for Rio Tinto, increased by 8% year-on-year in Q3 to 15.1 million tonnes. This growth was driven by higher utilisation rates at Rio Tinto’s Amrun mine in Weipa, Australia, following the implementation of the company’s Safe Production System in 2021. The system uses data-driven insights to optimize maintenance scheduling and prevent bottlenecking. Total bauxite production for the first nine months of 2024 rose by 9% year-on-year, totalling 43.2 million tonnes.

Outlook for 2024

Looking ahead, Rio Tinto expects to produce between 660,000 and 720,000 tonnes of mined copper and 230,000 to 260,000 tonnes of refined copper for the remainder of 2024, indicating a steady production forecast for the rest of the year despite the challenges faced in Q3.

BHP Moves Forward with Olympic Dam Smelter Expansion in Australia

BHP

Company Begins Application Process for Significant Copper Production Boost

On August 30, Australian mining giant BHP announced the initiation of an application and assessment process for its planned expansion of the Olympic Dam smelter and refinery in South Australia. This expansion aims to enhance copper production capabilities at the site, which currently processes copper concentrate from the Olympic Dam, Prominent Hill, and Carrapateena mines. In the fiscal year ending June 30, the South Australian operations achieved a record cathode production of 215,700 tons.

BHP is set to make a final investment decision on the first phase of the expansion by mid-2027. The company plans to increase its copper output by 4% in the 2025 financial year through higher-grade ores at its Escondida mine in Chile and overall asset productivity improvements. Future growth prospects include significant expansions across Chilean facilities, with investment decisions expected between 2026 and 2029. BHP also targets increasing South Australian copper production to 500,000 tons annually by the early 2030s and 650,000 tons by the mid-2030s.