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El Niño, a natural climate pattern in which sea surface temperatures in the central and eastern tropical Pacific Ocean rise at least 0.5°C above average, could disrupt copper and nickel production through early 2027, as droughts, flooding and power shortages threaten major mining regions, according to BMI, a unit of Fitch Solutions.
Mines, smelters as well as ports and transport infrastructure are likely to be affected, with extreme weather constraining output and increasing supply-side volatility as a result of weather disruptions.
The US National Oceanic and Atmospheric Administration Climate Prediction Center's (NOAA CPC) said in its October 2026 update that strong-to-very strong El Niño conditions were likely to persist through January-March 2027, with an 83% probability that the event over October-December 2026 period would exceed the intensity of previous episodes dating back to 1950.
It is estimated that El Niño events occur every two to seven years and typically last for nine to 12 months, but they can persist for longer. It affects weather and mining operations differently depending on the region, making weather drier in parts of Australia and Southeast Asia and wetter in South America.
BMI expects that structural supply-side risks, including operational constraints, declining ore grades and policy uncertainty to overshadow El Niño disruptions for now.
Commodities supply squeeze
Copper and nickel markets are expected to be the most affected, as key core production hubs lie directly in the weather pattern’s most volatile pathways.
As major copper operations are located in Latin America, flood risks especially in Chile and Peru could impact production and transportation of the vital metal and add to its supply squeeze.
A previous El Niño event in 2017 caused copper operations in Chile including Anglo American’s (LON: AAL) Los Bronces and Codelco’s El Teniente to halt activities.
In Africa, the threat comes from the opposite extreme. Drier conditions in Zambia and the Democratic Republic of Congo could reduce hydropower generation, triggering electricity shortages and raising costs for energy-intensive copper smelters.
For nickel, the story is not very different.
El Niño’s is expected to create a near-term operational risk in Indonesia as drought-related water constraints can impact nickel production, before easing with the return of the wet season.
In September 2026, Indonesia Morowali Industrial Park confirmed that several nickel smelters had reduced output amid water shortages, with earlier news reports indicating that about 100,000 tonnes of NPI production could be affected.
Any weather-related disruptions this year and into early 2027 are likely to be more supportive for copper, while nickel’s substantial inventory overhang may limit price upside unless operational disruptions are prolonged. BMI said both markets are likely to remain in a modest surplus in 2026.
Region dependent
Depending on what region mining operations are located, production impacts and their extension can be different.
BMI’s ESG Country Risk team expected that higher drought risk to be the principal impact of the 2026-2027 El Niño. Power shortages are most likely in countries where hydropower dominates the electricity mix.
In monsoon-dependent regions, El Niño can impact the volume and timing of the rainfall, impacting the replenishment of water reserves before the dry season. BMI says that this could impact future hydropower generation, tightening energy availability and disrupt production, long after El Niño has passed.
China’s aluminum sector could face production curbs because of its reliance on hydropower in certain producing regions. Heavy rainfall risks in lithium operations in Latin America can delay production and project ramp ups.
Countries with less than 20% of their electricity generated from hydropower, including Mexico and South Africa, face a different exposure. BMI expects peak-power constraints rather than widespread outages to be the more likely consequence.
As the global rush for critical minerals supply intensifies, El Niño can become another enemy countries need to take down to secure the supply chain.