Supply growth is being restrained by a number of factors. For example, heavy rains that hit Chile last month resulted in an estimated loss of 7,000 tonnes of copper for state-owned Codelco,
which may dampen forecasts for the whole year. Declining copper head grades is another issue, which puts a drag on mining productivity. Though copper output in Peru rose 35% in May compared with the same month last year,
local miners complain about red tape jamming up new projects, which are already battered by regular protests.
Confronted with this and other challenges, Peru could end up losing its mantle as the world’s No. 2 copper-producing nation to the Democratic Republic of the Congo.
And some countries, such as the US, don’t see a supply risk for copper at all and refuse to add it to the critical minerals list.
All of these factors are heating up the market. And the current lull could be the calm before the storm, which will hit other sectors as well, while copper, according to some forecasts, could jump tenfold.
To avoid major supply shocks, it’s necessary to invest heavily in copper production and bring new mines to fruition as planned.