Copper: the 'oil of the AI era'

This location holds a status in the copper mining world roughly equivalent to Saudi Arabia’s Ghawar oil field. Situated in Chile’s northern Atacama Desert, the Chuquicamata mine began commercial operations in 1915. Over the course of a century, its open-pit excavation expanded to 4.3 kilometers in length and 850 meters in depth—making it one of the largest open-pit mines on Earth. It has produced over 40 million tons of copper, generating fiscal revenue for generations of Chileans. At its peak, the mining site functioned as a fully self-contained small city—complete with schools, hospitals, churches, and a community of over 20,000 people—all built solely to serve this single mine. In 2007, due to severe dust pollution, the entire town was relocated en masse; the city was literally packed up and moved away, leaving only the pit to continue operating. In 2019, Codelco—the Chilean state-owned copper company operating Chuquicamata—announced publicly: 'The open-pit phase is finished.' Mining would now shift underground—a move that doubles costs, extends timelines, and consistently overshoots capital expenditure budgets. By 2022, Codelco’s copper output had fallen to its lowest level in nearly thirty years—not due to weak demand, but because the mine itself had aged. This is not just Codelco’s story—it reflects the broader reality across the global copper industry. The average grade of copper ore worldwide has declined from 0.8% in 2000 to just 0.46% today—a cumulative drop of roughly 40% since 1991. For the same volume of material excavated, less copper is recovered, while energy consumption and production costs rise steadily. From discovery to full production, developing a new copper mine typically takes ten to fifteen years: land acquisition and permitting, environmental impact assessments, infrastructure construction, and concentrator plant development—each step consumes time. Between 2012 and 2020, mining companies drastically cut exploration spending amid low copper prices. Today, that austerity is coming due—in the form of supply shortfalls expected to emerge after 2026. According to the International Energy Agency (IEA), under current mining plans, global mine output will meet only about 70% of global copper demand by 2035. So where will the shortfall be filled? Some may say, 'There are still new mines in the pipeline.' That answer is technically correct—but far less reassuring than it sounds. Indeed, several major projects are underway: Grasberg’s underground expansion (Indonesia, Freeport), Oyu Tolgoi (Mongolia, Rio Tinto), Kamoa Phase III (DRC, Zijin + Ivanhoe), José María and Los Azules (Argentina). Yet even the earliest of these won’t begin production until 2029–2030; the largest, El Pachón (Glencore), isn’t scheduled to come online until 2034. These additions merely delay the inevitable—they are not a cure. S&P Global’s analysis clarifies the arithmetic: global copper mine output will peak in 2029, then enter a structural decline. By 2032, refined copper concentrate deficits are projected to reach 2.2 million tonnes. Most critically, the average time required to bring a new mine into production—from discovery to first output—has stretched from 12.7 years for projects initiated between 2005 and 2009, to 17.9 years for those launched between 2020 and 2023—and continues lengthening. To maintain Escondida—the world’s largest copper mine—at an annual output of 1.4 million tonnes through 2030, BHP alone must invest $9.8 billion in sustaining capital expenditures. Just holding existing mines steady carries this price tag.

Understanding China’s strategic metals and critical minerals—copper, in one article

As of end-2024, global economically extractable copper reserves stood at approximately 1.02 billion tonnes (U.S. Geological Survey [USGS] 2025 preliminary estimate, up 2% year-on-year). Reserve distribution: Chile (18.8%), Peru (11.9%), Australia (10.2%). The Democratic Republic of the Congo (DRC) saw its reserve share rise to ~8.5% (up from 2023, following inclusion of newly explored blocks). Global mined copper production In 2024, mined copper output totaled ~23.5 million tonnes (up 6.8% year-on-year), with production shares led by Chile (22%), Peru (11.5%), and the DRC (13%). Refined copper output in 2024 reached ~28.5 million tonnes, with China accounting for 45.2%, Chile for 7.2%, and the DRC for 7.5%. According to the International Copper Association’s World Bureau of Metal Statistics (WBMS), mined copper output in the first three quarters of 2025 already reached ~17.7 million tonnes, with full-year output projected to approach 24.8 million tonnes. China remains the world’s top refined copper producer, with its share rising slightly to 46%. China’s consumption profile China is the world’s leading producer of refined copper—but possesses insufficient domestic copper ore resources and low domestic mine output, relying heavily on imports. In 2024, China imported ~29.2 million tonnes of copper concentrate (per China Customs’ early-2025 release), resulting in a copper resource import dependency rate of ~79% (essentially unchanged from 2023). Primary import sources: Chile, Peru, and Mongolia. Notably, imports from Peru rose in 2024, accounting for ~28% of total imports (Chile: ~35%; Mongolia: ~12%). Driven by new-energy sector demand, China’s apparent refined copper consumption in 2025 is projected to reach 15.8 million tonnes, up ~4.5% year-on-year. Chinese enterprises’ global resource strategy To secure long-term copper supply, Chinese firms continue intensifying equity acquisitions and development investments in copper resources across Africa and Latin America. Africa In the DRC, Chinese enterprises have accelerated copper-cobalt mine development. In 2024, DRC’s mined copper output reached 3.1 million tonnes (per DRC Central Bank data, up 9.2% year-on-year), surpassing Peru to rank second globally—over 75% of which came from Chinese-owned or -operated mines. The DRC hosts a ~320-kilometer copper-cobalt belt (with ~20 km of newly identified prospective extensions added in 2023), attracting dense investment—especially from Chinese firms. Key participants include: CMOC Group (China Molybdenum), China Railway Group (Huagang Mining), MMG (Minmetals Resources), China Nonferrous Metal Mining Group, Northern Mining, Jinchuan Group, Zijin Mining, Huayou Cobalt, Jinxin Mining, and Shengtun Mining. In 2025, two large-scale open-pit copper mines developed by Chinese firms commenced operations in the DRC, adding combined annual capacity of ~600,000 tonnes. Total investment by Chinese enterprises in the DRC—from 2018 through end-2025—is projected to exceed USD 26 billion (up ~USD 6 billion from 2023 levels), with ~USD 3 billion invested in 2025 alone.

Copper Mines Need $332 Billion New Investment to Ease Shortfall

22 hours ago

BNEF estimates copper mines need $332 billion in investment to avoid a 20 million metric ton supply shortfall by 2050. Surging electrification demand risks a market deficit by 2028 without significant capital outlays.

bloomberg

2026-10-19

Copper Mines Need $332 Billion New Investment to Ease Shortfall

Copper Mines Need $332 Billion New Investment to Ease Shortfall

FAQ