SANTIAGO: Chile’s ageing copper mines have been battered by deadly accidents, extreme weather and operational missteps, raising questions over how quickly the world’s biggest producer can recover from its lowest output in more than two decades.
At least seven workers have died at Chilean mines in the past month, including two in an avalanche at Codelco’s El Teniente operation.
Severe rain and snow have repeatedly disrupted mines and infrastructure, while simmering labour tensions are adding another layer of uncertainty even after workers at an Antofagasta Plc mine ended a strike and BHP Group narrowly averted a walkout at Escondida, the world’s largest copper mine.
The troubles are playing out as traders, producers and investors gather for LME Week in London, where faltering mine supply is likely to be a key topic as participants negotiate contracts for 2027.
While tariff-related trade flows have been the main driver of record copper prices this year, mining problems are another critical factor, particularly in Chile, which accounts for more than 20% of global mined supply. The setbacks are increasing the likelihood of the first annual decline in global mine output since 2017 – just as demand from data centres and power-grid expansion accelerates.
The recent spate of extreme weather is exposing a longer-term dilemma for an industry built around Chile’s historically arid conditions.
It also offers a glimpse of what could lie ahead for mines and infrastructure as a powerful El Nino develops.
Higher summer temperatures risk causing ice masses to shift at high-altitude operations, threatening pit stability and transport routes.
“There’s clearly a strong influence from climate change and the mining sector’s limited ability to adapt,” said Cristian Cifuentes, head of research at Chilean copper-study center Cesco.
Weather disruptions are landing on top of more fundamental hurdles. Chile’s giant mines are growing older; pits are getting deeper and ore quality is deteriorating, meaning companies have to move and process more material to produce the same amount of copper. — Bloomberg
