How is the copper mining industry faring? What is its current development status?

Sector Consumption Share Core Driver in 2026 Power 43% UHV (ultra-high-voltage) transmission/distribution networks; State Grid’s RMB 4-trillion investment during the 15th Five-Year Plan (2026–2030), driving annual incremental copper demand of 430,000–720,000 tonnes New-energy vehicles & transportation 15% 83 kg copper per EV (vs. only 23 kg per ICE vehicle); dense rollout of EV charging infrastructure Home appliances & air conditioning 13% Stable domestic air-conditioner sales; growing overseas exports Machinery & electronics 11% AI data centers, 5G base stations, lead frames for semiconductor chips Construction 11% Completion of stalled housing projects; copper piping in green buildings Others 7% Ships, defense, consumer goods Two key conclusions: First, the power sector is the largest copper buyer—and demand is accelerating. During the 15th Five-Year Plan (2026–2030), State Grid plans to invest RMB 4 trillion in grid upgrades and modernization—RMB 800 billion annually, a 40% increase over the 14th Five-Year Plan. UHV lines consume 40–70 tonnes of copper per kilometer, versus just 1–2 tonnes/km for conventional high-voltage lines. This single investment item alone will drive an annual incremental copper demand of 430,000–720,000 tonnes. Second, new-energy vehicles represent the fastest-growing demand segment. A pure electric vehicle uses 83 kg of copper—3.6 times more than an internal-combustion-engine vehicle. Global NEV production is projected to exceed 25 million units in 2026, generating over 500,000 tonnes of additional copper demand from this segment alone. VII. Key Bottlenecks Across the Value Chain and Investment Implications Bottleneck 1: Extremely long mine expansion cycle (17+ years) The global average time required for a major copper mine to progress from exploration to production exceeds 17 years. Over the next five years, confirmed new mine output will be concentrated in Kamoa-Kakula (Zijin Mining) and KFM (China Molybdenum) in the DRC; QB-series expansions in Chile; and Phase II of China’s Julong Copper Mine (Zijin Mining). Total incremental output is expected to reach only 300,000–600,000 tonnes annually—growth of under 1.5%, while demand growth stands at 2.3%–3%. Supply-demand deficits will widen annually. CITIC Securities forecasts refined copper deficits of 100,000, 290,000, and 480,000 tonnes in 2026–2028 respectively, with deficits projected to expand further into the longer term. Bottleneck 2: Extreme concentration at the mine level Top-five global copper mining companies’ projected 2026 output: Rank Company Projected 2026 Output (10,000 tonnes) Key Mines 1 BHP 195 Escondida, Chile (world’s largest copper mine) 2 Anglo American 192 Post-merger with Teck Resources 3 Freeport-McMoRan 178 Grasberg, Indonesia 4 Zijin Mining 120 Kamoa + Julong + Serbia 5 Codelco 116 Aging mines suffering grade decline Combined output of the top five exceeds 8 million tonnes—out of ~23.2 million tonnes of global mined copper production—implying a CR5 exceeding 34%. The top 20 mines account for over 60% of global output. This oligopolistic structure means that any disruption at the mine level—strikes, declining grades, or policy risks—will trigger faster and more severe supply contractions than anticipated. Bottleneck 3: China’s import dependency exceeds 80% In 2025, China imported 30.31 million tonnes of copper concentrate—a record high, up 7.9% year-on-year. Import sources are highly concentrated—Chile, Peru, the DRC, and Mongolia dominate.

Nonferrous Metals—Seeing the Big Picture Through Small Details: Understanding Copper Supply Constraints via Codelco

To extend mine life and offset output declines caused by falling ore grades, Codelco has continuously raised its capital expenditures. Its capex rose from approximately USD 3.3 billion in 2015 to around USD 5 billion in 2025, with the majority allocated to sustaining capital expenditure. Codelco management describes these investments as necessary to address the ‘natural deterioration of ore grades in current deposits’ and ‘compensate for the impact of declining grades at existing mines.’ On the cost side, falling grades have increased mineral processing complexity, pushing up cash costs: Codelco’s C1 (cash) cost per tonne of copper rose 377%, from USD 963 in 2000 to USD 4,599 in 2025. Meanwhile, rising sustaining capex has driven up depreciation, amortization, and interest expenses per tonne: financial expenses per tonne surged 984%, from USD 58 in 2000 to USD 631 in 2025; depreciation and amortization per tonne jumped 527%, from USD 264 in 2000 to USD 1,656 in 2025. As a result, Codelco’s C3 (all-in) cost per tonne has risen roughly sixfold since 2000, reaching USD 8,221/tonne in 2025. Although the 2025 average copper price sits at the 100th percentile relative to its 2000–2025 range, Codelco’s per-tonne net profit ranks only at the 45th percentile, and its net margin at just the 20th percentile—indicating that even seemingly high prices fail to effectively stimulate sufficient supply. Outlook: Dual constraints—geological endowment and human factors—lead to persistently low output expectations From 2019 to 2025, Codelco missed its annual production targets for six consecutive years, averaging a shortfall of ~5% (~70,000 tonnes annually). These repeated misses stem not from isolated operational missteps in any given year, but rather from the combined effects of: (i) natural depletion of core assets entering deeper and underground mining phases—marked by heightened volatility in ore grade, recovery rate, and mining sequence; and (ii) frequent operational and safety disruptions—including abnormal rainfall and a strike at Chuquicamata in 2019; low-grade ore and poor recovery rates in 2022; operational difficulties in H1 2023 and the El Teniente earthquake. Additionally, critical structural projects intended to offset aging-mine depletion—including the Chuquicamata underground transition, El Teniente expansion, Andina system upgrade, and Salvador/Rajo Inca—have long suffered delays due to design revisions, geological complexity, accident-related shutdowns, budget overruns, and slower-than-expected ramp-up post-commissioning. At a deeper level, chronic underinvestment, maintenance backlogs accumulated during the pandemic, and ongoing constraints on supply chains and skilled labor have further eroded equipment reliability and project execution efficiency.

Austrian investor rushes to boost copper production at old Chile mine

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Global Critical Resources plans to restart Chile's Tres Valles copper mine to address global supply shortages, targeting 30,800 tons annual output despite facing environmental and payment hurdles.

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Austrian investor rushes to boost copper production at old Chile mine

Austrian investor rushes to boost copper production at old Chile mine

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