Copper Mine Production Set for First Annual Decline Since 2017 as Prices Hit Records

Global copper mine production is on track to decline this year for the first time since 2017, despite record prices. This unusual trend has analysts at Sprott Inc. warning that a supply crunch may be looming in the copper market.

The main drivers of the expected decline are mine disruptions, declining ore grades, and Chile's struggling copper production. Mine disruptions include geotechnical failures, permitting stoppages, labour action, power and water constraints, which subtract tonnes from annual guidance after mine plans have already been set.

Declining ore grades is a slow and irreversible trend that means mines must move more material to deliver the same metal, raising unit costs, energy and water use. Chile, the world's largest copper producer, accounting for about 23% of global mine output in 2025, is particularly affected by this trend.

State-owned Codelco, the world's second-largest copper miner, has missed annual production targets for seven consecutive years and has withdrawn its 2026 guidance. Antofagasta and Lundin Mining have also lowered their 2026 outlooks in August, shaving a combined 35,000 to 55,000 tonnes from guidance.

The copper market's response to high prices is not following the usual script. Instead of increasing production, miners are struggling to keep up with demand. This has led Sprott to warn that adjustment will have to come from scrap flows, inventory draws, smelter utilisation, or demand destruction through price.