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Any new copper smelting capacity built for supply security makes more sense in consumer countries than in producing countries, Antofagasta Chief Executive Officer Iván Arriagada said at the LME Metals Seminar in London on Monday October 19, attended by Fastmarkets. He said the miner has no plans to invest in smelting or refining.
“We see ourselves as a pure-play copper, upstream mine producer, and focused in the Americas,” Arriagada said during a fireside chat with London Metal Exchange Chief Executive Officer Matthew Chamberlain.
Chamberlain had asked whether, “in a world of negative TC/RCs”, Antofagasta’s capital expenditure was better spent upstream, at the concentrator and the mine, rather than in smelting and further downstream.
Fastmarkets’ copper concentrates TC implied smelters purchase, cif Asia Pacific, was calculated at $(242.00) per tonne on October 16, down by $4.05 per tonne from $(237.95) per tonne on October 9.
Fastmarkets’ copper concentrates TC implied traders purchase, cif Asia Pacific, was calculated at $(314.00) per tonne on October 16, down by $7.55 per tonne from $(306.45) per tonne on October 9.
“This is a market where there tends to be an oversupply globally. That’s the reality of the market,” Arriagada said of smelting and refining.
He acknowledged that fragmented trade could change the case for building new capacity in some places.
“In the context of fragmented trade tariffs, it may make sense to actually develop some capacity for security of supply and de-risking the value chain,” he said.
But he said such capacity was best located where the metal is consumed, because consumer countries could then feed plants with concentrates, cathode or secondary material.
“So we are not planning therefore in our portfolio to invest in smelting and refining,” Arriagada said.
He said companies producing concentrates with impurities, or more complex material that is harder to trade, may need their own smelting capacity. He cited state-owned Codelco, which he said is revamping or replacing its smelting capacity in Chile for that reason.
First annual drop in mine supply since 2017
Arriagada’s comments came as speakers at the seminar pointed to tightening mine supply.
Vale Base Metals Chief Executive Officer Shaun Usmar said in the industry keynote address earlier on Monday that global copper mine supply fell by about 1.1% in the first half of 2026. He said it is expected to decline by 2% over the full year because of operational disruption, extreme weather, declining grades and execution challenges.
“This year is on track to be the first annual decline since 2017, at a time when we have growing demand and we’re trying to grow supply,” Usmar said.
Arriagada said Chilean output is likely to be slightly lower year on year in 2026. He cited a severe winter linked to El Niño, which brought heavy rain and flooding after 10-12 years of drought, and the more structural decline in ore grades.
He said Chilean authorities expect the country’s copper supply to grow by about 3-4% in 2027.
Antofagasta expects to increase production by 30% against its 2024 baseline before the end of the decade, Arriagada said. Its investment cycle at Los Pelambres and Centinela includes a new concentrator at Centinela, to be commissioned in 2027.
Copper demand is expected to grow by 2-3% per year over the next 10 years, Arriagada said. He added that it takes about 15 years to turn a discovery into a producing mine.
“That’s really the story of copper, is one of supply shortage,” he said.
Chamberlain noted that the LME cash copper price was above $14,000 per tonne and that Antofagasta’s realized price was up by 36% in the first half of the year.
LME cash to three-month copper traded last at a $110 per tonne backwardation at 12:15pm on Monday.
Chile, Peru, Argentina could supply 35-40% of world copper
Arriagada said secondary supply could grow to about a third of total copper supply but would not change the market’s fundamentals.
“It will play a part, it will play a role, but I don’t think it will change the essential fact that more mining is required,” he said.
He said Chile, Peru and Argentina could together supply 35-40% of the world’s copper if projects in the region are developed. He put Chile’s potential at about 6 million tonnes per year, Peru’s at 2.5 million tonnes and Argentina’s at 1.5 million tonnes.
Turning that potential into supply would require “institutional agility” from governments, including putting treaties on binational mineral exploitation into practice, Arriagada said.
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