Beyond the crude oil crisis, a copper shortage is also imminent! S&P: Global copper deficit may reach 10 million tonnes by 2040.

According to a January report released this year by S&P Global, the global copper supply deficit is projected to widen to 10 million tonnes by 2040, by which time demand is expected to rise to 42 million tonnes—up 50% from current levels. More urgently, ING forecasts that refined copper shortages will reach 600,000 tonnes in 2026, extending the 200,000-tonne supply deficit anticipated for 2025. Tightening supply has already left a clear imprint on prices. In 2025, the front-month copper futures contract on the U.S. Commodity Exchange (COMEX) surged over 41% for the full year—the largest annual gain since 2009, when the contract soared 138%. So far this year, copper prices have continued rising by nearly 2%. Copper is often dubbed the "barometer" of the global economy, with broad applications across power grids, renewable energy systems, and electric vehicles. Meanwhile, the booming artificial intelligence industry has introduced a new demand driver—data centers rely heavily on copper throughout their construction and operation, including in power systems, cooling equipment, and network infrastructure. Frequent mine accidents prolong supply shocks for years Multiple commodities experts point out that disruptions in mine production are the core cause of copper supply shortages in 2025, with ripple effects set to persist for several years. Charles Cooper, Head of Copper Research at Wood Mackenzie, told CNBC: "Last year, the industry faced numerous major challenges… all three of the world’s largest copper mines experienced temporary shutdowns." Specifically, the Kamoa Kakula mine in the Republic of Congo—one of the world’s top-tier copper mines—was severely affected by flooding in the first half of 2025, prompting downward revisions to its output forecasts for both 2026 and 2027. El Teniente, the world’s largest underground copper mine operated by Chile’s state-owned Codelco, suffered a fatal tunnel collapse in June last year. Claudio Sougarret, General Manager of the mine, recently stated that the accident will continue weighing on production over the next five years. Indonesia’s Grasberg mine experienced a deadly landslide in September last year, leading to a 35% downward revision of its 2026 output forecast; operations are not expected to return to normal before 2027.

Latin American commentary: MMG’s Las Bambas copper mine in Peru halted production due to an accident; Peru’s response will signal country-specific investment risk.

▍01 The Las Bambas accident will trigger regulatory procedures, making resumption timing uncertain The Las Bambas copper mine is located in Peru’s Apurímac region and ranks among the world’s top ten open-pit copper projects. It constitutes a major portion of Peru’s copper production capacity and is owned and operated by MMG Limited—a subsidiary of China Minmetals Corporation. Its copper concentrate is shipped across the Pacific Ocean to smelters in China, playing an irreplaceable role in the global supply chain in the short term. This shutdown resulted from an equipment maintenance incident at the ore concentration clarifier, which caused two worker fatalities and three injuries. Under Peruvian law, upon occurrence of a workplace fatality, Peru’s National Labor Inspectorate (SUNAFIL) and the Ministry of Energy and Mines have the authority to issue partial or full suspension orders to investigate the cause of the accident and determine liability. The actual timeline for resuming operations remains uncertain. Past handling of similar incidents by MMG will influence how long the Peruvian government maintains its suspension order. Production can only resume after the investigation concludes and all required safety rectifications are completed. Historical precedents show such suspensions typically last anywhere from several days to several weeks. Market attention focuses not only on reduced output from Las Bambas itself, but more importantly on the compounding impact of this shutdown on the global copper concentrate supply-demand balance. ▍02 South America faces multiple supply risks, amplifying the effect This shutdown differs qualitatively from previous isolated incidents, as the entire South American copper-producing region is simultaneously confronting multiple overlapping risks. Long-standing community conflicts persist along the Southern Peruvian Mining Corridor. This approximately 450-kilometer transport road serves as the sole route for Las Bambas’ copper concentrate to reach the port of Matarani for export. Over the past three years, communities in Apurímac, Cusco, and Arequipa have repeatedly blockaded this corridor, causing repeated logistics disruptions. MMG has been forced to negotiate case-by-case—and no structural solution has yet emerged. Chile, the world’s largest copper producer—accounting for roughly 27% of global supply—is currently experiencing suboptimal output. Several aging mines operated by state-owned Codelco are seeing declining yields; Chuquicamata mine’s transition to deeper-level mining continues to introduce uncertainty into quarterly output projections. Together, Chile and Peru account for over 35% of global copper production. Simultaneous operational disruptions across these two core producing regions represent precisely the scenario copper traders fear most for 2026. Against this backdrop, Las Bambas’ copper concentrate output carries exponentially heightened significance in global markets. Even a temporary shutdown will exacerbate raw-material tightness. ▍03 MMG continues bearing additional social costs and public scrutiny Although the Las Bambas project generates profits for MMG, it has consistently incurred high political costs and social burdens. With total investment exceeding USD 10 billion, the project commenced commercial operations in 2016. Since then, it has repeatedly faced community protests, road blockades, and temporary shutdowns. These disruptions have cost the company lost output and necessitated numerous compensation agreements with local communities—cumulatively amounting to hundreds of millions of dollars in losses.

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