Workers at the Escondida mine (Escondida) located in Chile, the largest copper mine in the world, have announced that they will strike starting at 8 AM local time on Wednesday. This decision comes after the failure of government-mediated negotiations for a new contract. The workers' union represents approximately 1,020 workers at this mine, which supplies nearly a quarter of Chile's copper.
Increasing Demand for Copper
As the Escondida mine strike begins, demand for copper is on the rise. Global copper demand is expected to grow from 28 million tons in 2025 to 42 million tons by 2040. This increase is primarily driven by rising consumption in artificial intelligence data centers and defense industries, each of which is expected to nearly triple their current consumption. However, estimates suggest that copper supply may fall 10 million tons short of demand.
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Decline in Copper Production in Chile
Copper production in Chile fell by 12.8% in August, reaching 369,500 tons, the lowest monthly figure since February 2011. Additionally, heavy rainfall on Sunday led to an earthquake at the El Teniente mine of Codelco, resulting in the deaths of two contractors and forcing the company to partially suspend its operations. This situation is expected to worsen with the occurrence of the El Niño phenomenon in the coming months.
Moreover, companies in Chile are facing numerous challenges. Permits can take up to 12 years, and President José Antonio Kast ordered in March that 50 pending requests related to $16 billion projects be expedited. Meanwhile, in Peru, President Keiko Fujimori's government is seeking permits for 240 exploration and extraction projects, but there are nearly 200 social conflicts in the country, 64 of which are related to mines and environmental issues.
Argentina has also not produced copper since 2018, and the Vicuna project is considered the country's largest test. This project aims to make a final investment decision for the first phase of $7.1 billion by the end of this year and to start copper production by 2030.
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