Water shortage and other factors caused the decline of copper production in Chile

According to the BNAmericas website, the copper price was at a high level in the first half of 2026, and the export of Chilean mineral products reached a new high. However, several copper producers faced different management and production problems.

According to data from relevant departments, in the first half of 2026, Chile's export of mineral products reached US$ 36.8 billion, a year-on-year increase of 20.4%.

In the same period, the international copper price was US$ 5.94/lb, and Chile's copper exports were US$ 30.2 billion, up 11.5% year-on-year, accounting for 50.1% of exports.

However, since the beginning of this year, the monthly economic activity index (Imacec) of Chile has been declining, mainly due to the poor performance of the mining industry. Due to the decline in copper production in several mines, the mining industry index has dropped by 11.6% year-on-year.

The main reasons for the decline of mining industry are:

• Lack of water
• Decline in grade
• Unexpected shutdown and maintenance of mines
• Conversion from oxidized mines to sulfide mines
• Labor disputes

Strikes are intensive, as rising copper prices stimulate miners to demand more income.

From the cumulative output in the first five months of 2026, the output of the following mines decreased:

• Escondida
• Collahuasi
• Los Pelambres
• El Abra
• Candelaria
• Bayas, Lomas Bayas

Mines facing water shortage for a long time include:

• Los Bronces
• Zaldívar

Other mines are experiencing the transition from near-surface high-grade oxidized ore to mixed ore and sulfide ore, which requires more complicated treatment process and higher cost, such as Sentini.

Labor disputes have also affected the copper industry, including the Mantoverde mine strike, which has affected production.

The Imacec index for the first five months of 2026 released by Chile's central bank in July once again shows that the country's economy is heavily dependent on copper mining.

Copper mining accounts for more than 10% of Chile's national GDP, so the decline of mining industry by 11.6% affects all aspects of the economy.

One way to solve the diversification of mining industry is lithium, and its proportion in exports has increased. It is very important to seize the opportunity of rising lithium price, which is conducive to consolidating a pillar industry in Chile.

source:https://geoglobal.mnr.gov.cn/zx/kydt/zhyw/202607/t20260716_10274443.htm