In 2026, the mining industry that has just recently assessed the impact of disruptions at Grasberg and Kaoma-Kakula mines, faces a new challenge. Copper producers using sulfuric acid to extract metal from ore have faced a sharp rise in sulfur prices and a shortage of this reagent due to shipping disruptions in the Strait of Hormuz. Chile, the global leading copper producer and home to key copper assets owned by big miners, is also experiencing sulfur availability problems due to the export restrictions imposed by China. Sulfuric acid is used to produce about 20% of copper in the world (by a hydrometallurgical leaching method, SX-EW technology).
These disruptions cannot be considered the primary factor for copper price pressures, as the reduced supply is currently offset by declining demand. At the same time, trade flows disruptions from the Iran war weaken the global economic outlook, thereby avoiding the hypothetical situation of unmet demand in local markets; the International Copper Study Group (ICSG) has lowered its demand growth forecast for this year from 2.1% to 1.6% due to uncertainty surrounding the conflict in the Middle East. However, the fact that the industry is facing increasing unpredictable challenges to maintain the production levels does not help in resolving the ‘copper paradox’ - the need to exponentially elevate the output while simultaneously facing the increasing complexity of mining.
Problems related to sulfuric acid
Sulfur prices rose in 2026 due to the war in the Middle East and the blockade of the Strait of Hormuz. Almost half of maritime-shipped sulfur, which is used in the production of sulfuric acid, comes from refineries and gas processing factories in the Middle East. Amid a global shortage of raw materials, China imposed a de facto moratorium on the export of sulfuric acid, a byproduct of the metallurgy industry in the country, to protect its domestic market. Major copper producers such as the Democratic Republic of the Congo (DRC) and, especially, Chile, the largest importer of sulfuric acid, were hit. According to Reuters, China’s sulfuric acid exports to Chile dropped to zero in March 2026, for the first time since July 2023. Rapid reorientation of supplies, including those from Peru, is difficult due to capacity constraints and technological challenges associated with sulfuric acid processing - a chemical that is primarily used in fertilizer production - to obtain materials suitable for export. Without stable quantities of acid at affordable prices, the least profitable projects would be the first to face operational problems.
Major banks consider the sulfuric acid shortage caused by the conflict in the Middle East to be a key factor in the tightening copper market, along with supply disruptions from mines and potential U.S. tariffs. Morgan Stanley, in particular, predicts one of the largest copper deficits in more than a decade and estimates it at 600,000 tonnes.
Goldman Sachs estimates the potential losses due to a sulfuric acid shortage in the DRC at 125,000 tonnes, and in Chile at a maximum of 200,000 tonnes. This factor will be partially offset in case of a global economic downturn due to the prolonged closure of the Strait of Hormuz, and the global copper consumption may be reduced by 140,000 tonnes this year. For this reason, the bank has not yet revised its forecast for a copper surplus of 490,000 tonnes in the global market in 2026.
Resource nationalism
According to the ICSG, the copper market balance, despite the expected structural deficit, does not currently appear alarming as the institute expects a small surplus of 97,000 tonnes of refined copper this year, with production remaining nearly stable (up 0.4%) and consumption increasing by 1.6%. That said, the price of copper reached a historic high of around $14,000 per tonne on the LME this year, up 36% year-on-year by June.
Paradoxically, the price increase is occurring amid growing inventories. This process is driven by the fact that large consumers and some governments are stockpiling the metal in case of supply disruptions similar to the interruptions in deliveries of oil experienced during the war in Iran. The United States is building up an inventory of critical metals, including copper, as part of the Project Vault. Morgan Stanley, according to Forbes, has warned of a distorting effect on the copper market, as stockpiles accumulated in the United States under the Project Vault are viewed by the market as a strategic reserve.
Copper import surplus in the United States resulted in the accumulation of significant surplus inventories in the country, Nornickel wrote in a press release on its 2025 financial results. The redistribution of the metal between key trading venues - primarily an outflow of stocks from the LME to the benefit of U.S. COMEX exchange - was already observed last year. As a result, global inventories on the LME, Shanghai Futures Exchange (SHFE), and Chicago Mercantile Exchange (CME) reached a multi-year high of 704,000 tonnes by the end of the year, up 272,000 tonnes compared to the end of 2024.
Copper inventories on major exchanges in 2024 to 2026:
Source: UBS Mining Presentation May 2026
The accumulation of copper in the USA is also occurring amid concerns about the imposition of tariffs, Goldman Sachs notes. According to Goldman Sachs Research’s forecasts, a tariff of at least 25% on refined copper under Section 232 will be introduced in the U.S. by mid-June 2026, increasing the risk of further inventory accumulation in the USA and higher domestic premiums.
Major producers’ results and plans
According to the Q1 2026 results, the largest mining corporations demonstrated a variety of trends in copper production, for example, Glencore and Rio Tinto recorded significant growth, Anglo American maintained stability, and Chile’s Codelco faced a decline in volumes due to long-term infrastructure problems. At the same time, most companies confirmed their annual guidelines for 2026 amid high metal prices.
Consolidated copper production indicators for Q1 2026 and annual plans:
|
Company |
Production in Q1 2026 (thousand tonnes) |
Dynamics y-o-y |
Annual plan for 2026 (thousand tonnes) |
Main factors and changes |
|
BHP |
477 |
-7% |
1 900 – 2 000 (The reference point is shifted to the upper limit) |
Ore grade declines at Escondida and Spence offset by record processing; growth at Copper South Australia and Antamina |
|
Codelco |
273.1 |
-8% |
1 331 – 1 357 |
Scheduled maintenance amid a systemic crisis due to falling grades, delays in modernization of mines |
|
Freeport-McMoRan |
300.3 |
+7% |
1 406 (decreased) |
Q1 sales were above the forecast. The annual plan was cut by 136,000 tonnes due to logistics challenges at Grasberg (Indonesia). |
|
Rio Tinto |
229.0 |
+9% |
800 – 870 |
The main driver is the successful achievement of the design capacity at the Oyu Tolgoi underground mine. |
|
Glencore |
199.6 |
+19% |
810 – 870 |
Leader in growth. Rising copper grades in Africa, growth at Antamina. |
|
Anglo American |
170.4 |
+1% |
700 – 760 |
Growth at Los Bronces and Collahuasi offset planned declines at Quellaveco. |
BHP
BHP’s copper production for the nine months ending March 31, 2026, was 3% below the year-ago level and reached 1.46 mn tonnes. BHP confirmed that its copper production for the financial year (ending June 30, 2026) is expected to be in the upper half of its target range of 1.9 mn to 2 mn tonnes, which is driven by peak performance at the concentrators at its Escondida mine (Chile, BHP owns 57.5%), the largest in the world, and strong results at Antamina (Peru, BHP owns 33.75%).
The company’s strategic goal is to increase its copper production to 2 mn tonnes per year by the 2030s. To this end, BHP is implementing several projects, with the construction of a new concentrator at Escondida being a key one among them, as well as the expansion of capacity at Copper South Australia, its Australian division, and the development of the Vicuna project that includes two copper-gold deposits, Filo del Sol and Josemaria, on the Chile-Argentina border, in a joint venture with Lundin.
BHP copper segment growth projects:
Source: BHP BofA Global metals, mining and steel conference presentation
Codelco
The Chilean state-owned company continues to experience a systemic crisis. Its production in 2022 and 2023 fell to a quarter-century low as the modernization of aging mines and the launch of new projects are delayed. Last year, an earthquake resulted in an accident at Codelco’s flagship El Teniente mine, causing casualties. Due to the partial suspension of operations at the mine, Codelco reduced copper production by 48,000 tonnes and lost approximately $500 mn in EBITDA. It may take approximately eight years for the mine to reach its pre-accident capacity.
For 2026, a conservative production target of 1.344 mn tonnes is set (within a broader range of 1.331 mn to 1.357 mn tonnes). According to Cochilco (Comisión Chilena del Cobre), copper production in March 2026 alone fell 10% year-on-year (to 110,900 tonnes). The drop in metal production is due to long-term decline in ore quality, accidents, and delays in the modernization of the mine.
Codelco’s long-standing problems have been compounded by rising costs due to the war in the Middle East. The war has increased production costs at Codelco by at least 10 cents per pound, “which is a lot”, Maximo Pacheco, chairman of copper giant Codelco, told Reuters. “The biggest challenge facing the industry is operational continuity, and we see copper production becoming more difficult every day,” he added. However, Pacheco said Codelco purchased sufficient sulfuric acid before prices began to rise.
Next year, Codelco expects to increase its production to 1.5 mn tonnes (its own production, excluding minority stakes in mines, is expected to grow to 1.37 mn tonnes). The company is working to reverse the prolonged decline in production and reactivate the aging mines through expansion projects.
Codelco’s production in 2022 to 2025 and the company’s largest deposits:
Source: Codelco corporate presentation 2025 results
Despite all the challenges, Codelco is striving to surpass BHP and regain its position as the global largest copper producer, and its plan is to return to its pre-pandemic output level of 1.7 mn tonnes by 2030.
Codelco’s figures should be treated with caution: in May, the company announced the results of the audit that revealed deviations in its internal production valuation standards. Nearly 27,000 tonnes of copper, or approximately 2% of the annual volume, were only on paper, representing the work in progress.
Codelco has two major development projects, namely, the construction of an underground mine at Chuquicamata, one of the oldest deposits in the world, which is expected to extend its life by 41 years and is 90% complete, as well as the development of mining at three sites at the El Teniente deposit to extend the mine’s life by 43 years.
Freeport McMoRan
Freeport McMoRan’s production and sales in the first quarter were by 7% higher than the year-ago level and reached 300,000 tonnes, and its sales were above the company’s January forecast. The company’s operations in the USA contributed significantly to the increase, with the production at its Morenci mine (Arizona) up 19%. The company also recorded progress in innovative leaching initiatives, adding additional volumes. This technology is expected to deliver 300 mn pounds in 2026 and up to 800 mn pounds by 2030.
However, the consolidated sales forecast for the quarter was sharply reduced (from 3.4 bn pounds to 3.1 bn pounds), primarily due to a slowdown in production ramp-up at the Grasberg mine in Indonesia, which is due to the recovery from last year’s accident at Grasberg Block Cave. Grasberg’s output in 2026 has been reduced to 800 mn pounds of copper (from 1.1 bn) and 700,000 ounces of gold (from 800,000 ounces). The company expects capacity utilization at Grasberg to be on average about 65% in the second half of 2026, rising to 80% by mid-2027, and approaching full capacity by the end of 2027.
Due to the schedule shift at Grasberg, the production in the second half of 2026 will be about 30% higher than in the first half. The company’s plan is to achieve its long-term target of 4.1 bn pounds (about 1.86 mn tonnes) of copper by 2028.
Freeport’s copper sales, 2025 to 2028:
Source: FCX 1Q 2026 Results
Freeport’s project portfolio includes the expansion of the Bagdad mine developing one of the largest deposits in the USA and the world with ore reserves of 873.6 mn tonnes at a grade of 0.36% copper, as well as the construction of a processing factory and a desalination plant at the El Abra deposit in Chile (51% Freeport, 49% Codelco).
Rio Tinto
Rio Tinto’s consolidated copper production in the first quarter increased by 9% year-on-year, to 229,000 tonnes. The key driver of this growth was the ongoing and successful ramp-up of the Oyu Tolgoi underground mine in Mongolia. The output increase at Oyu Tolgoi (up 56%, to 102,000 tonnes) offset the impact of a planned grade reduction at Escondida and the temporary shutdown of the Kennecott smelter in the United States due to safety incidents.
The annual production target for 2026 was confirmed at 800,000 to 870,000 tonnes. As part of its long-term strategy, Rio Tinto aims to increase its total capacity to 1 mn tonnes copper per year by 2030, anticipating a 13-percent increase from the 2025 level. Oyu Tolgoi will account for about half of this figure, and production at this asset grows as planned with an average of approximately 500,000 tonnes of copper by 2030.
Rio Tinto’s copper segment:
Source: Slides for Bank of America Global Metals Mining Steel Conference 2026
Glencore
After a significant decline in 2025 (down 11%), Glencore became the leader in portfolio growth pace in the first quarter of this year. Its own copper production in January–March 2026 jumped by 19% to 199,600 tonnes. The main growth came from its African assets (KCC and Mutanda in the DRC) thanks to higher ore quality, as well as from its Antamina mine in Peru. The first quarter confirmed the trend of the second half of last year, when the production began to recover from a significant decline in the first half caused by lower ore grades and recovery rates at Collahuasi, Antamina, and Antapaccay.
The forecast for the full 2026 remains unchanged at 810,000 to 870,000 tonnes. Glencore notes that production will traditionally shift to the second half of the year (52% of volume), when the water supply situation at Collahuasi (a 44-percent stake, JV with Anglo American, which also owns 44%, and the rest 12% are owned by Japan’s Collahuasi Resources) improves. The long-term forecast assumes a return to 1 mn tonnes of copper by 2028.
Without taking into account the growing projects, the output will decline significantly after 2029. Therefore, Glencore is preparing a portfolio of brownfield projects with the goal of increasing copper production up to 1.6 mn tonnes by 2035. The largest projects are the expansion of Antapaccay (Peru) and the NewRange copper-nickel project (USA, JV with Teck), as well as the greenfield project at Argentina’s El Pachon.
Glencore’s copper growth projects:
Source: Glencore 2025 Capital markets day presentation
Anglo American
Anglo’s quarterly copper production showed a symbolic 1-percent increase to 170,400 tonnes. Increased throughput at Chile’s Los Bronces and Collahuasi mines offset the planned grade reduction at Quellaveco’s flagship in Peru.
The full-year forecast was maintained at 700,000 to 760,000 tonnes. It’s worth noting that the company lowered this guidance earlier this year (previously, the target was at 760,000 to 820,000 tonnes) due to technical constraints in Chile, and did not revise it during the first quarter.
By 2028, Anglo expects to achieve an 18-percent increase in production and reach 790,000 to 850,000 tonnes, thanks to Collahuasi, where higher-grade sites will be mined, and the commissioning of the Los Bronces mine.
The Copper Paradox
While each big miner strives to attract investors offering a large portfolio of copper projects, these are insufficient to meet rapidly growing demand, supplemented by new drivers in recent years such as the expansion of grid infrastructure, the transition to green energy, the electrification of transport, and the growth of AI data centers, in addition to traditional consumption sectors.
Copper consumption sectors:
Source: UBS Mining Presentation May 2026
According to industry estimates, over the next 25 years, humanity will need to produce as much copper as it did in the previous 125 years. However, the global ore grades are trending lower fast, so ever larger quarries must be made and greater energy used to extract the same amount of metal. While the global average copper ore grade was 2% to 5% at the beginning of the 20th century, today the industry operates with a 0.5-percent average copper ore grade, and by mid-century, it will fall below 0.25%. Actually, the industry must extract 10 times more ore while preserving 10 times less content of useful metal, which is not just an operational challenge, but a structural barrier to the energy transition.
The copper paradox:
Glencore estimates that by 2050, the gap between copper demand and production, including scrap recycling, should increase from 300,000 tonnes to 27 mn tonnes. After 2030, supply growth from existing copper concentrate production facilities and projects under construction is expected to cease.
Source: Glencore 2025 Capital markets day presentation
BHP points out that more than half of the large operating copper deposits have been in production for at least 21 years and at most over 50 years, which inevitably leads to a decline in grades that have fallen by 40% since the early 1990s.
Copper mines are getting older and grades are declining:
Demand for copper is expected to grow 1.7-fold by 2050 amid the economic growth, the energy transition, digital infrastructure needs, and the substitution of other metals.
Sergey Bondarenko for Rough&Polished
