Copper mine supply: Short-term supply struggles
The challenge is that supply is struggling to keep up, with both long-term structural issues and significant immediate-term disruption, with Goldman Sachs cutting its 2026 global mine supply forecast by 350,000 tonnes:
- the closure of the Strait of Hormuz , means diesel and sulphuric acid (used in processing about one-sixth of the world’s copper) supply shocks are raising mine operating risks and costs — and, as HSBC warns, could represent an acute shock to supply
- a reported delay to the restart of Freeport Indonesia’s Grasberg Block Cave copper mine into early 2028
- a fatal tunnel collapse at Codelco’s flagship El Teniente mine forced the Chilean state copper producer to cut its 2025 production guidance to 1.34-1.37 million tonnes, down from 1.37-1.40 million tonnes
- significant downward guidance revisions of copper output at mines operated by Ivanhoe and Teck
- average copper grades have fallen from 1.02% in 2022 to 0.66% in 2025 across the Codelco (the state-owned mine and largest copper producer in the world) aging portfolio; output from the world’s third-largest copper producer saw a sharp 12% year-on-year decline in 2025 in Peru
Exploration is the big bottleneck
The long-term crisis in copper supply is the structural weakness: the copper industry is simply not finding and building enough future mines to manage any short-term disruption and incoming demand.
S&P Global says 162 of 258 major copper discoveries made between 1990 and 2024 remain undeveloped, 134 have not completed feasibility studies, and only 17 have reached construction. It also estimates global copper mine supply, including operating mines and pipeline projects, could peak at 27.3 million tonnes in 2030, then decline to 25.1 million tonnes in 2035. The IEA makes a similar point: only 5% of copper deposits discovered in the last 35 years were found in the last decade.
Yet, exploration capital is not yet behaving as if this is an emergency.
S&P Global’s 2026 exploration trends report says the global nonferrous exploration budget slipped to US$12.4 billion in 2025 and grassroots exploration fell to a record-low 21% share of global budgets. For copper, grassroots work accounted for only 25% of base-metals exploration budgets in both 2024 and 2025.
And, even if exploration trends were higher, with an average timeline of approximately 17 years from discovery to production of copper mines — and even longer for projects initiated after 2025 — it would still take decades before the supply pipeline increases.
This is where the juniors move back into focus — the next supply cycle has to start with discovery, drilling, permitting and feasibility work long before the market needs the tonnes. So tomorrow’s copper supply starts with today’s exploration budget.
Copper demand
Copper demand is rising because grids, EVs, construction, industry and data centres are all expanding, with the IEA projecting total demand reaching 34.1 million tonnes by 2040. Copper’s bull case is resilient because the demand stack has deepened — and, just as important — the new demand drivers are increasingly price resilient
Unlike other sectors where high input costs might take a bite out of demand, data center developers are largely indifferent to copper prices. According to Wood Mackenzie (WoodMac), the metal accounts for less than 0.50% of total project costs, which is little more than a rounding error in an industry that is considered a national security priority.
In other words, high prices is unlikely to stand in the way of demand. Data centers will be built whether copper is trading at US$10,000 or US$20,000.
That puts copper explorers, developers and high-quality juniors back into the frame. The next mine does not start when the market finally wants copper. It starts years earlier, when capital is still willing to fund discovery.
If AI is the new demand shock, critical minerals are the physical chokepoint. And copper is one of the clearest tests of whether the world can build the power economy it is now promising.
