Codelco, Chile's state-owned copper giant, is targeting roughly $2 billion in cost reductions as preliminary audit findings raise fresh governance concerns, mining.com reported. The austerity drive comes as the global copper market faces an increasingly severe supply crunch. J.P. Morgan projects a refined copper deficit of roughly 330,000 metric tonnes in 2026, far larger than earlier estimates.
Supply disruptions remain the dominant constraint. The Grasberg mine in Indonesia — the world's second-largest copper operation — remains underutilized following a fatal mudslide and tailings incident in September 2025, with output cut by 35% through 2026. Benchmark Mineral Intelligence estimates nearly 600,000 tonnes of contained copper will be lost between September 2025 and end-2026 from Grasberg alone.
In Chile, Teck's Quebrada Blanca 2 faces ongoing waste-storage issues that have pushed expansion projects past 2027. El Teniente lost 48,000 tonnes in 2025 from a rock burst, with another 25,000 tonnes expected in 2026. The ICSG now expects refined copper output growth to slow to just 0.9% in 2026, sharply below demand growth, swinging the market from a previously expected 209,000-tonne surplus to a deficit of 150,000–330,000 tonnes.