The global copper market is approaching a key inflection point.
Disruptions to mine supply, a lack of major discoveries, and rising demand are all threatening to widen an already persistent supply deficit.
The Financial Times recently reported that analysts are anticipating a “big shortfall” in copper supply beginning in 2027.
The prospect of a copper shortage is nothing new, but warnings of a rapidly widening supply gap offer a fresh reminder of the challenges ahead.
Sprott (TSX:SII) had cautioned that the copper market, already in a deficit, has little capacity to absorb further supply shocks following a string of mine disruptions in 2025.
That means any production halt, whether caused by extreme weather, mine accidents, or labour disputes, risks adding further pressure to an already tight market.
UBS Group (NYSE:UBS) now forecasts the copper deficit to reach 379,000 tonnes next year, a 73% increase on its expected deficit of 219,000 tonnes in 2026.
Copper prices tell the story
The strength of copper prices suggests the supply concerns are legitimate and are being reflected in the market.
Even as the potential catalyst of US tariffs on refined copper has faded and buying from top consumer China has slowed ahead of the October holiday period, prices have remained elevated.
Benchmark copper on the London Metal Exchange is hovering around US$14,800 ($21,116) per tonne, approaching the record set earlier in September.
Bank of America (NYSE:BAC) has lifted its average 2026 copper price forecast by 11% to US$11,313 a tonne, citing widespread mine disruptions.
Deutsche Bank (ETR:DBK), too, raised its 2026 forecast to an average of US$12,125 per tonne, while UBS says it sees copper reaching US$15,000 in December.
Copper has gained nearly 20% so far this year, shaking off some of the inflationary pressures that have weighed on other metals such as gold.
Supply disruptions mount
Analysts broadly point to weak mine supply as a major driver of copper’s rally.
In Chile, the world’s largest copper-producing nation, conditions have remained challenging following a 2.1% decline in production last year.
Severe winter weather has already disrupted several major mines in the country’s north, including Lundin Mining’s (TSX:LUN) Caserones operation, as reported by Mining.com.au.
This further exacerbates Chile’s production problems, as state-owned miner Codelco is already hard-pressed to recover its output, which is at multi-decade lows. Last year’s fatal collapse at its El Teniente underground mine only added further pressure.
Those at Sprott and Bank of America also highlighted setbacks in 2025 at other major copper operations, including Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of the Congo.
Kamoa-Kakula operator Ivanhoe Mines (TSX:IVN) already lowered its production forecast for this year. The Grasberg mine, managed by Freeport-McMoRan (NYSE:FCX), is running at around half capacity.
Meanwhile, delays at Teck Resources’ (TSX:TECK) Quebrada Blanca Phase Two Project in Chile and uncertainty surrounding the future of First Quantum Minerals’ (TSX:FM) Cobre Panamá remain threats to future production.
Discoveries and grades decline
Even without these mine disruptions, the longer-term trends point to mounting challenges for copper supply.
A new Moody’s (NYSE:MCO) report finds Chilean miners are still facing declining ore grades and increasing operational complexity, while higher labour, energy, and other input costs are pushing production costs higher.
The credit ratings firm says the industry’s current investment cycle favours reserve replacement and could strengthen long-term competitiveness, but requires substantial financing at a time of rising costs and operational risks.
“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 report says.
Apollo Global Management (NYSE:APO) recently highlighted a sharp decline in major copper discoveries.
The number of discoveries containing at least 500,000 tonnes of copper has fallen from double digits annually during the 1990s and 2000s to just one or two deposits in recent years, with none recorded in 2025, according to Apollo’s research note.
Apollo estimates it now takes an average of 18 years to move a copper deposit into production, meaning new discoveries are unlikely to provide an immediate answer to the supply challenge.
At the same time, AI and data centre development are adding copper-intensive demand over a two- to three-year cycle, pointing to a structurally tighter market and upward pressure on prices, Apollo notes.
An earlier S&P Global (NYSE:SPGI) study estimates copper demand from AI and data centres could roughly triple by 2040, adding a combined 4 million tonnes (Mt) of demand.
Including other sectors, S&P expects global copper demand to reach 42Mt by 2040, around 50% above current levels, while existing supply is expected to decline.
Global copper production is projected to peak at 33Mt in 2030 unless significant adjustments are made, according to S&P.
US copper mine enters the scene
With demand continuing to grow, a substantial injection of new mine supply will be needed to ease the tightening market.
One option is to redevelop past-producing mines, potentially shortening development timelines compared with bringing entirely new discoveries into production.
Gunnison Copper (TSX:GCU), for example, recently brought the Johnson Camp mine (JCM) in Arizona, US, into commercial production, around a year after producing its first copper cathodes on site.
Located in Cochise County, JCM has a mining history spanning more than 140 years and operated for around a decade during the 1970s and 1980s before changing ownership several times. Gunnison acquired the project in 2015.
In 2023, Gunnison partnered with Nuton, a Rio Tinto (ASX:RIO) technology venture, which subsequently funded and helped re-engineer the operation.
Production at JCM is now ramping up towards nameplate capacity of 25 million pounds of copper cathode annually.
Gunnison is also advancing its namesake project in Arizona, which is envisioned as a vertically integrated operation producing an average of 174 million pounds of copper cathode annually, according to a technical report.
Porphyry potential in Nevada
Redeveloping historical mines alone is unlikely to address the longer-term need for large new copper resources.
In Nevada, Copper One Resources (CSE:CEXY) has assembled a district-scale land package at its Majuba Hill Copper-Silver-Gold Project, where it sees potential for a large porphyry copper system.
The property comprises 403 federal lode mining claims and four private parcels covering a combined 39km².
According to Copper One, the area has a history of copper production dating from the early 1900s through to the 1950s. Records show underground mines produced around 2.8 million pounds of copper from outcropping porphyry mineralisation, alongside silver, gold, and tin.
Majuba Hill has already undergone several years of drilling. After consolidating 100% ownership of the property this year, Copper One is stepping up exploration towards a maiden resource estimate.
The company also owns the Redonda Copper-Molybdenum Project in British Columbia, Canada, which was explored by Teck Resources during the 1970s.
Large British Columbia resource
Also in British Columbia, Kodiak Copper (TSX-V:KDK) is exploring the porphyry copper potential of the Quesnel Terrane.
The company has consolidated a 357km² land package forming its flagship MPD Project, which it describes as a large porphyry district that has never previously been explored as a single project using modern methods.
Previous operators completed 524 drill holes totalling 74,443m from the 1960s onwards, confirming copper as well as gold mineralisation across a large area.
Since 2019, Kodiak has completed another 192 holes totalling 89,122m, including the discovery of the Gate zone during its first drilling program.
Further drilling in 2020 led to what Kodiak calls a “transformative discovery” within a wider mineralised envelope at Gate, returning what the company says were the highest grades recorded in the property’s more than 70-year exploration history.
The work culminated in an inaugural 2025 resource covering seven deposits, containing 719 million pounds of copper equivalent in the indicated category and another 2.52 billion pounds in the inferred category.
Kodiak is now pursuing an aggressive drilling program aimed at expanding that resource.
“At the beginning of 2027, we’ll do a resource update, and that should show significantly more pounds,” Kodiak CEO Claudia Tornquist told Mining.com.au earlier this year.
VMS potential in eastern Canada
Meanwhile, Nine Mile Metals (CSE:NINE) is exploring for copper across the large volcanogenic massive sulphide (VMS) systems of eastern Canada.
The company holds four projects in New Brunswick’s Bathurst Mining Camp, which it describes as one of the world’s largest VMS camps.
According to Nine Mile, this district covers approximately 3,800km² and hosts 95 copper, lead, zinc, silver, and gold occurrences, including 45 deposits.
One of Nine Mile’s assets is the Wedge Mine Project, where the company continues to follow up ‘high-grade’ copper results after previous laboratory results returned grades exceeding 29% copper (Cu).
The Wedge deposit was historically mined by Cominco, producing 1.503Mt grading 2.88% Cu.
Nine Mile Vice President of Exploration Gary Lohman says historical mining and exploration were limited to the upper portion of the deposit, with current drilling aimed at expanding the mineralised footprint and adding to the resource.
The company’s three other projects have also identified copper-rich VMS mineralisation, including Nine Mile Brook, the company’s largest property. Nine Mile Brook sits around 10km southwest of the historical Brunswick 12 mine, one of the world’s largest underground zinc mines.
With supply struggling to keep pace with rising demand, bringing new and historical copper projects into production will be increasingly important to narrowing the looming gap.
Write to Jackson Chen at Mining.com.au
Main Image: Gunnison Copper
