Chile recorded its weakest month of copper production in more than 15 years in August, adding to supply concerns at the world’s largest producer of the industrial metal.
Copper output fell to 369,500 tonnes during the month, down 12.8% from a year earlier, according to data from Chile’s National Statistics Institute (INE).
The result marked the country’s lowest monthly production since February 2011, falling even below levels recorded during the 2017 strike at Escondida, the world’s largest copper mine.
The August decline extends a difficult year for Chile’s mining sector, which has been hit by severe winter weather and operational disruptions.
Those setbacks have compounded short- and longer-term challenges, from mine accidents to labour tensions, declining ore grades, and ageing deposits.
Earlier this month, a worker died in an accident at Escondida amid contract talks between operator BHP Group (ASX:BHP) and a union representing supervisors.
Workers at Antofagasta’s (LSE:ANTO) Centinela copper mine, meanwhile, are currently in government-mediated talks after two unions rejected the company’s latest contract offer, raising the prospect of a strike.
Production struggles persist
The latest decline adds to years of underperformance for Chile’s copper industry, with production failing to return to previous highs despite elevated copper prices and billions of dollars in investment.
Output fell 7% year-on-year during the first seven months of 2026, with lower production from state-owned Codelco and the Escondida and Spence mines contributing to the decline.
Chile’s finance minister has warned that full-year production could fall by around 7%, significantly more than the 2.6% decline forecast by state copper agency Cochilco. Cochilco currently expects production of 5.27 million tonnes in 2026.
The weak performance comes as ageing mines require increasingly large investments simply to maintain existing production.
A recent report by Moody’s Ratings, part of Moody’s (NYSE:MCO), says Chile is undergoing an investment cycle focused largely on sustaining production and replacing depleted reserves as major deposits mature.
Declining ore grades and greater operational complexity are also contributing to rising production costs, it says.
“High copper prices support profits, but capital expenditures absorb much of that profit and leave high-cost producers exposed to a price correction,” Moody’s writes.
Write to Jackson Chen at Mining.com.au
Main Image: Codelco
