en.Wedoany.com Reported - Chile's two largest copper producers released weaker-than-expected production updates within days of each other in July 2026, intensifying market concerns that the country's copper output may have entered a plateau phase. Antofagasta, Chile's largest private copper producer, reported a 9.5% year-on-year decline in copper production for the first half of 2026. Meanwhile, the chairman of Codelco, Chile's state-owned copper company, told a congressional committee that output may remain near the 2025 level of 1.33 million tonnes, making it difficult to achieve the long-term target of 1.7 million tonnes by 2030. This has reinforced expectations of slowing copper production growth in Chile.
These production updates came as an atmospheric river storm disrupted operations in Chile's copper belt. Codelco estimated that the storm reduced output at its El Teniente underground mine by approximately $7.5 million per day. Although weather has impacted short-term production, rising capital requirements and declining ore grades have already increased the cost of replacing Chile's aging deposits, a trend that will persist after the storm passes. The key question is whether recent production data reflects temporary weather disruptions or indicates that Chile, which supplies about a quarter of the world's mined copper, has entered a production plateau due to aging deposits and declining grades. If the slowdown in production growth is geological rather than weather-related, replacing Chile's supply will become more capital-intensive and increasingly dependent on new mining districts.
Chile's largest copper deposits are aging porphyry systems, where declining grades increase the cost of maintaining production. Miners must move and process more rock to produce the same amount of copper, driving up operating costs and sustaining capital requirements. A global sulfuric acid shortage has further increased processing costs for Chile's oxide ores, adding pressure on project economics. Additionally, a pending audit by Cochilco, Chile's copper commission, of Codelco's 2025 production has introduced governance risks following reporting issues involving approximately 20,000 tonnes of copper.
Marimaca Copper reported results from its July 2026 expansion drilling at the Pampa Medina prospect, located 28 kilometers east of its Marimaca oxide deposit in Chile's Antofagasta region. The drilling extended a high-grade bornite-chalcocite zone, with intercepts including 6.11% copper and 24.0 grams per tonne silver over narrow widths. The program also identified copper mineralization for the first time in basement metasedimentary rocks, expanding exploration targets beyond the known mineralized zone. Marimaca Copper CEO Hayden Locke noted that scalable copper projects are very limited in the sector, and no junior mining company holds large-scale development assets ready for production.
Fitzroy Minerals reported additional drilling results from its Buen Retiro project near Copiapó, Chile, and expanded its 2026 drilling program to approximately 22,000 meters. The company reported near-surface intercepts of 59.0 meters grading 1.73% copper, as well as a higher-grade core of 12.0 meters grading 5.39% copper. The company is also evaluating a lower-capital development route involving the production of copper sulfate concentrate on-site, which would then be trucked to an existing third-party electrowinning plant, rather than building a standalone processing facility. Fitzroy Minerals President and CEO Merlin Marr-Johnson cited a report from BHP stating that Escondida will spend approximately $5 billion, with output potentially reaching 1 million tonnes per year by 2030, a decline of 20% or even 30% from current levels; BHP also indicated zero growth in Chile from 2031 to 2040. He believes all this suggests that copper prices must undergo a substantial revaluation.
As production growth slows at Chile's existing copper operations, exploration and development capital is shifting to the Abitibi Greenstone Belt in Quebec, the Vicuña district spanning Argentina and Chile, the South Australian copper province, and the Minto-Carmacks belt in the Yukon. Abitibi Metals reported its 2026 mineral resource estimate for the B26 polymetallic deposit in Quebec, with resource tonnage increasing 124% since 2023. The updated resource totals 25.3 million tonnes, including 13 million tonnes of indicated resources (2.1% copper equivalent grade) and 12.4 million tonnes of inferred resources (2.2% copper equivalent grade). The company also acquired the remaining interest from its joint venture partner, consolidating 100% ownership of the deposit, and is funding an 80,000-meter drilling program for 2026 and 2027. Abitibi Metals Founder and CEO Jon Deluce stated that Quebec is a very popular jurisdiction, and many developers with multi-million-ounce equivalent resources have been acquired. He believes this M&A activity will not stop, as few projects are available on the market, and producers remain behind in replenishing exploration and development targets.
Mogotes Metals signed a binding term sheet with Rio Tinto in July 2026 regarding its Filo Sur project in the Vicuña district. The Filo Sur project is adjacent to the Filo del Sol discovery by BHP and Lundin Mining, with drilling at the Albor target yielding intercepts of 180.0 meters grading 0.98% copper equivalent. Under the agreement, Rio Tinto will receive an initial equity stake through a private placement and obtain an exclusive negotiation period for the project. Mogotes Metals CEO Allen Sabet emphasized that no other major discovery like Filo has been made in the past 30 years, and when something similar is touched, it naturally attracts interest.
Beyond new discoveries, existing projects with permits, processing infrastructure, and established mines provide another source of incremental copper supply. Selkirk Copper reported progress on the second phase of its drilling program at the past-producing Minto project in Canada's Yukon Territory, while advancing a project restart decision. The project includes an existing 4,100-tonne-per-day mill and underground infrastructure from prior operations. The company also eliminated legacy precious metal and concentrate offtake agreements through bankruptcy proceedings, improving expected project cash flows. The company has completed 27,300 meters of its planned 50,000-meter second-phase drilling program and expects to complete an updated mineral resource estimate and preliminary economic assessment (PEA) this month. Cobra Resources reported drilling results from its Manna Hill project in South Australia's Nackara Arc and exercised its option to acquire the project in July 2026. A core drilling program of four holes intercepted bornite-rich mineralization associated with porphyritic diorite and monzonite intrusions. The company also identified a correlation between mineralization and inversion model magnetic anomalies, providing a geophysical target for testing within the remaining license area.
Three measurable indicators over the next two quarters will determine whether Chile enters a production plateau or merely recovers from first-quarter weather disruptions. First is the result of Cochilco's pending audit of Codelco's 2025 production, expected to be released in September 2026. Second, whether Chile's major state-owned and private producers will continue to lower production expectations relative to previous multi-year targets after the storm-related disruptions. Third, whether more Chilean producers will downgrade production guidance in the next reporting cycle. Similar revisions by multiple companies would support the broader trends indicated by BHP's capital intensity data and Cochilco's industry analysis, rather than company-specific operational issues. In this context, as producers seek new sources of future output, exploration, restart, and development projects across multiple jurisdictions will become increasingly important for global copper supply.
Weather disruptions may be temporary, but declining grades at existing operations are a multi-year constraint on production growth. Development-stage projects that expand high-grade resources near existing infrastructure can advance production faster than greenfield discoveries requiring new permits and processing facilities. Restart projects with existing permits, mills, and tailings infrastructure can make construction decisions without the multi-year permitting process required for greenfield developments. Byproduct credits from gold, silver, or molybdenum improve project economics by reducing net production costs, independent of copper prices, providing a buffer against rising costs reported by industry producers. Investment and technology alliances from diversified major miners increasingly support junior exploration companies advancing projects in emerging copper districts beyond mature mining regions. Projects spanning Chile, Quebec, the Vicuña district, the Yukon, and South Australia diversify permitting, regulatory, and geological risks across multiple mining jurisdictions.
Chile's recent production slowdown may have been exacerbated by severe winter weather, but declining grades, rising capital intensity, and governance risks point to broader constraints on future copper supply. As maintaining production at Chile's mature deposits becomes increasingly costly, exploration and development capital is increasingly flowing to emerging copper districts and restart projects in other jurisdictions. The next two quarters, particularly Cochilco's audit and updated production guidance from major producers, will determine whether Chile returns to its previous growth trajectory or enters a period of slowing supply growth with implications for the global copper market.
