How El Niño Impacts the Copper Market

An El Niño Forecast to Reach Record Strength

El Niño impacts the copper market mainly by disrupting mine supply. NOAA’s forecasters give the current event a greater than 90% chance of reaching very strong intensity during the Northern Hemisphere autumn and winter of 2026-27, and a 69% chance that its October-December peak exceeds every El Niño in records going back to 1950.¹ Operational and policy responses are already visible: Antofagasta cut guidance after severe weather in Chile, Peru has declared preventive flood emergencies for the 2026-27 event, and Zambia continues to ration power following the 2023-24 drought.

Copper is unusually exposed among industrial metals because so much of its supply sits directly in El Niño’s path. Chile produces roughly a quarter of the world’s mined copper, Peru around a tenth, and Zambia about 4%.² All three have weather-sensitive mining, logistics or power infrastructure.

Snow in Chile, Floods in Peru, Drought in Zambia

In Chile, El Niño winters tend to push extra moisture into the central and north-central Andes, where high-altitude mines receive it as heavy snowfall and valley infrastructure receives it as flooding. In July 2026, storms prompted Chile’s government to declare a state of catastrophe in the Coquimbo Region, home to some of the country’s largest operations.³ No attribution study cited here establishes that El Niño caused the July storms, although the pattern increases the likelihood of winters like this one.

In Peru, warm coastal waters produce torrential rain along the normally arid coast, and floods and landslides threaten the access roads, concentrate pipelines and ports that connect Andean mines to export markets. In February 2026, months before the basin-wide event became established, intense rain brought deadly flooding to the Arequipa region and Peru declared district-level states of emergency across parts of Arequipa and Ica.⁴ In July the government went further, declaring a preventive state of emergency covering specified districts in more than 20 departments, explicitly tied to the El Niño 2026-2027 phenomenon.⁵

The rainfall that determines Zambia’s copper output falls hundreds of kilometres from the mines, over the Zambezi catchment. The country draws more than 80% of its electricity from hydroelectric dams, above all Kariba on the Zambezi River,⁶ and past El Niño events have often been associated with below-average November-to-March rainfall across much of southern Africa, although individual seasons vary. When Kariba’s water level falls, the state utility ZESCO rations power, and the copper mines and smelters of the Copperbelt are among the largest loads on the grid. Zambia’s current shortfall predates this El Niño: it dates from the 2023-24 drought, and a strong event raises the odds the region stays dry.

El Niño Enters Q2 2026 Earnings Calls and Guidance

The July 2026 storms created measurable operational costs at Chilean mines. Antofagasta (LSE: ANTO) halted operations at Los Pelambres after heavy rain and snow, then cut its full-year production guidance to 625,000-655,000 tonnes from 650,000-700,000 tonnes, a reduction of roughly 5% at the midpoint. The company still reported first-half EBITDA of $2.84 billion, up 27% year on year, on the strength of copper prices. On the half-year results call, CEO Iván Arriagada said the mine faced its most severe weather event on record and put the cleanup at “about 5 million cubic meters of snow.”

“El Niño phenomenon now happening. It does not happen every year, but this year it’s been here and it’s been extremely severe.”

— Iván Arriagada, CEO, Antofagasta

Lundin Mining (TSX: LUN) also suffered an infrastructure outage. Its Caserones mine in the Atacama region received 3.4 metres of snow, and COO Juan Andrés Morel told the company’s second-quarter call that “winds reached over 125 kilometers per hour” and that “ice buildup damaged two power line towers that required repairs.” The mine ran without grid power for 13 days, with supply restored on July 30. Caserones had produced 73,000 tonnes of copper in the first half and was tracking toward the top of its range; Lundin kept group guidance intact but now expects the mine to finish in the lower half, and it postponed a planned mill shutdown to January to recover output.⁷ Candelaria, further south, took roughly 35 millimetres of rain and kept milling from stockpiles with no guidance change.

Chilean state producer Codelco, which is not listed, reported first-half production down 11% to 564,000 tonnes, mainly on operational restrictions at its El Teniente mine following last year’s fatal accident; weather was not among the reasons it gave.⁸ The company lowered its 2026 outlook to about 1.34 million tonnes from roughly 1.37 million tonnes.⁹ The national copper commission Cochilco followed by cutting its forecast for Chile’s total 2026 output to 5.27 million tonnes after a weak first half.¹⁰

In Peru, the flooding season arrived early in the year. Freeport-McMoRan (NYSE: FCX) reported first-quarter production of 210 million pounds from its share of operations, roughly flat year on year.¹¹ February’s floods hit the Arequipa region that surrounds its majority-owned Cerro Verde complex, though the company did not disclose a material production impact from them. MMG (HKEX: 1208), owner of Las Bambas, delivered record first-half earnings,¹² and on its interim results call management named a possible super El Niño as a risk of shipping and operating instability in the second half.

Zambia’s Hydropower Squeeze

The Kariba Dam on the Zambezi River supplies much of Zambia’s electricity. Photo Credit: JonGT, CC BY-SA 4.0, via Wikimedia Commons

Zambia’s grid was already constrained before this event began. ZESCO has been under a drought-driven force majeure since 2024, and Lake Kariba’s usable storage stood at 46% in early August 2026, double the 23% recorded a year earlier.¹³ Even so, ZESCO has rationed power to industrial users since March, with smelters first in line for cuts.¹⁴

The listed miners have reduced their dependence on that grid. First Quantum Minerals (TSX: FM), whose Kansanshi and Sentinel mines anchor its earnings while normal mining at Cobre Panamá remains suspended (processing of stockpiled ore restarted in May 2026), sourced about 80% of its Zambian power from imports and independent producers in the second quarter, with only 20% from ZESCO. The company reported no material power-related production impact: Sentinel produced 50,000 tonnes of copper in the quarter and Kansanshi 44,000 tonnes.¹⁵ Barrick Mining’s Lumwana mine, in the middle of a major expansion, draws on the same constrained grid.

That sourcing flexibility is the main difference from a decade ago, when miners had few alternatives to the national grid.

A History of El Niño and the Copper Market

Zambia’s dependence on Kariba was laid bare in 2015-16. The lake fell from 40% full in July 2015 to 12% by January 2016, and ZESCO asked mining companies including Glencore (LSE: GLEN) and Vedanta Resources to cut power demand by 30%.¹⁶ Glencore suspended its Mopani Copper Mines, then responsible for 26% of Zambian production, for 18 months in the same period, though the company attributed that decision to low copper prices and shaft upgrades rather than to the power crisis.¹⁷

The 2023-24 drought was more severe, but the damage to copper output was smaller. Kariba’s usable storage fell below 3%, parts of Zambia endured power cuts of up to 21 hours a day, and ZESCO asked miners to curtail demand by as much as 40%.¹⁸ Yet Zambia’s copper output rose 12% in 2024 to about 820,700 tonnes as producers imported power and new capacity ramped up.¹⁹

In 1997-98, one of the strongest El Niños ever measured coincided with falling copper prices, as the Asian financial crisis was collapsing demand across the region at the same time. El Niño impacts supply; demand, dominated by China and increasingly by grid and energy transition spending, has usually mattered more for where the price ends up.

Mines in the Path

The table below maps this season’s exposure across listed owners. It describes physical and disclosed exposure, and it is a snapshot of a moving event rather than a forecast of damage.

Several market indicators show whether these disruptions add up to a genuine deficit. Cochilco’s monthly Chilean production data will reveal how much of the lost July output gets recovered. Kariba’s weekly usable-storage readings track Zambia’s power supply directly. Treatment and refining charges reflect how tightly smelters are competing for concentrate, and exchange inventories on the LME, COMEX and SHFE record whether the market is drawing down stock.

The disruption is not confined to Chile, Peru and Zambia. Ivanhoe Mines founder Robert Friedland, writing in an August 28, 2026 post on X, claimed that drought has dropped Papua New Guinea’s Fly River low enough to disrupt shipments from the state-owned OK Tedi mine, which barges its copper-gold-silver concentrate hundreds of kilometres downriver to port.²¹ OK Tedi has not published its own statement on the disruption, and Friedland is a commentator here rather than the operator, so the claim carries his framing:

“Increasingly extreme weather, due to the century-high intensity of this year’s El Niño, is significantly disrupting everything around our planet, including copper mine supply.”

“There is no easy copper supply anywhere in the world anymore…”

— Robert Friedland, Founder and Executive Co-Chairman, Ivanhoe Mines

The forecasts also point to a long event. NOAA gives El Niño a 97% probability of persisting into early spring 2027, with the peak forecast for October through January.²² That window covers Peru’s next rainy season, where preventive emergency declarations are already in place across more than 20 departments, and the Zambezi wet season that will decide how far Kariba refills.