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Global mine production of copper is on track to fall this year for the first time since 2017, breaking a near-decade of growth as mine disruptions, dwindling ore grades and a slump in top producer Chile combine to tighten a market already at record prices, Sprott Inc. said.
The warning cuts against the usual commodities playbook: when prices rally, miners should pull more metal out of the ground. This cycle, that response has stalled.
“Record prices are supposed to pull metal out of the ground. In copper, they are not managing it,” Sprott said in a note. The supply dip in a metal at the centre of electrification — grid rebuilds, transformers, data-center power distribution, electric vehicles and heat pumps — reads as a structural signal rather than a seasonal wobble, it added.
Sprott pointed to three overlapping drivers. The first is mine disruptions, the fastest-moving and hardest to predict: geotechnical failures, permitting stoppages, labour action, power and water constraints that subtract tonnes from annual guidance after mine plans and smelter concentrate contracts have already been set.
The second is declining ore grades, a slow and irreversible trend. As copper content per tonne of rock falls, mines must move more material to deliver the same metal, raising unit costs, energy and water use — and meaning capital spending buys fewer tonnes than it did a decade ago.
In the March episode of METALS 100, we were honored to invite Gordon Aldcorn, President of Prismo Metals (CSE：PRIZ；OTCQB：PMOMF), to join us for a conversation, bringing us the latest updates on the company’s development and sharing details of its projects as well as its share price performance. Prismo Metals is a mining exploration company focused on advancing the exploration and development of its Silver King, Ripsey and Hot Breccia projects in Arizona and its Palos Verdes silver project in Mexico.
The third is Chile. The world’s largest producer, accounting for about 23% of global mine output in 2025, is exactly where grade decline bites hardest at its mature, deep, water-constrained operations. National output fell 6.6% in the first half of the year and dropped 9.4% year-on-year in July. Chilean copper commission Cochilco has cut its 2026 production forecast to 5.27 million tonnes.
State-owned Codelco, the world’s second-largest copper miner, has missed annual production targets for seven consecutive years. In August it withdrew its 2026 guidance and effectively abandoned a longer-term goal of restoring output to 1.7 million tonnes by the end of the decade. Antofagasta and Lundin Mining also lowered their 2026 outlooks in August, shaving a combined 35,000 to 55,000 tonnes from guidance.
None of these responds to a price signal within a year. A new copper mine takes roughly a decade from discovery to commissioning — Sprott cites an industry average of about 17.5 years — and brownfield expansions still require permits, water rights and power. A price record in 2026 tends to show up as metal in the 2030s, if it shows up at all.
Demand is not waiting. Grids in the U.S., Europe and Asia are being rebuilt and extended, data-center construction is adding load at speed, and vehicle electrification continues to raise copper intensity per vehicle. With mine growth no longer the release valve, adjustment has to come from scrap flows, inventory draws, smelter utilisation, or demand destruction through price.
The squeeze is already rippling through the processing chain. When concentrate supply tightens, treatment and refining charges — the fees smelters earn for turning concentrate into metal — get squeezed as smelters compete for scarce feed.
Investors expressed the view on Friday through copper miners and copper futures. The COPX miners ETF closed at $86.67, up 0.07%, while CPER, which tracks futures rather than equities, rose 1.24% to $40.15.
The split matters. Futures outperforming miners is the pattern that appears when the market is pricing tighter metal rather than better producer margins: a miner facing falling grades and disruption risk spends part of a higher copper price moving more rock.
U.S. tariff expectations have further distorted global flows. U.S. cathode imports hit a record 223,000 tonnes in July, and COMEX inventories have risen 712% since February 2025 while LME and Shanghai inventories have fallen. When copper hit its August peak, nearby LME metal commanded a $545-per-tonne premium over three-month material, the widest backwardation since 2021.
Sprott flagged three indicators to confirm or reverse the call: Chilean monthly production data through year-end, successive quarterly guidance revisions from major producers, and the treatment-charge environment, the cleanest real-time read on whether concentrate is genuinely scarce.
Because the causes — and grade decline in particular — are structural rather than cyclical, the debate may shift quickly from whether supply is shrinking to how long it stays tight. For strategic buyers in grids, AI data centres and defence, high copper prices have yet to meaningfully dampen procurement, given copper’s small share of total project costs.
That, Sprott suggested, is what makes this cycle look less like a normal pullback and more like the start of a longer story.
