Deadly storm in Chile disrupts copper mines and raises AI supply concerns

{"text":[[{"start":8.35,"text":"A deadly storm in Chile threatens copper production and has added to concerns over the industry’s ability to supply the metal crucial to the AI boom."}],[{"start":17.45,"text":"Canadian base metals group Lundin Mining suspended operations at its Caserones copper–molybdenum operation in Chile’s Atacama region last week, where heavy snowfall had disrupted power supplies, while copper miner Antofagasta paused mining and processing for several days at its Minera Los Pelambres site. "}],[{"start":37.75,"text":"The extreme weather caused flash flooding, as well as heavy snow at higher altitudes where some major copper mines are located. The storm has killed at least 13 people, according to officials. "}],[{"start":49.55,"text":"Snow also affected some operations at state-run copper miner Codelco, where operations at major mines including El Teniente were temporarily halted. Executives at majors including Anglo American and BHP are also closely monitoring the situation and in touch with Chilean authorities. "}],[{"start":66.8,"text":"Copper is essential for the build-out of electricity grids, renewable energy and the data centres that will power AI. But experts are forecasting a widening shortage of the red metal in the decades to come, with supply shocks likely to become more common as climate change accelerates and fuels extreme weather events."}],[{"start":null,"text":"

"}],[{"start":86.25,"text":"With copper stocks in the global network of London Metal Exchange warehouses already declining, “added supply risks like Chile are only upping the ante to copper price volatility”, said StoneX analyst Natalie Scott-Gray."}],[{"start":99.6,"text":"More broadly, mining investors “are increasingly trying to understand how physical [climate] risk translates into production disruption, cash flow, insurance costs and asset valuation”, said Giuseppe Amitrano, founder of risk analysis group WieldMore Investment Management. In a mining nation such as Chile, “even temporary disruption can matter for commodity markets”, he said. "}],[{"start":123.1,"text":"Although miners typically bake some weather-related disruption into their forecasts, doing so accurately is likely to become more challenging as weather patterns change. "}],[{"start":133.25,"text":"The disruption in Chile — where a state of emergency has been declared in certain regions — comes days after miners including BHP warned of declining copper production thanks in part to ageing mines that over time contain less of the red metal."}],[{"start":149.1,"text":"Accidents and interruptions at major mines last year helped propel the copper price to a series of record highs. Prices have continued to rise in recent weeks on fears that the US could impose new copper import tariffs and as Chinese buying has picked up."}],[{"start":164.6,"text":"Many mines are in areas at risk from extreme weather events, the frequency of which is increasing thanks to climate change. That could mean more operations being halted, with concerns also rising about the demand for water by the sector in countries that are at growing risk of drought."}],[{"start":null,"text":""}],[{"start":180.79999999999998,"text":"“There is a risk that as more mines are built in countries that are already water-stressed, that increases the pressure on the system,” said Benchmark analyst Albert Mackenzie."}],[{"start":191.24999999999997,"text":"Older mines, where the concentration of metal in the ground may be lower, required more water to produce copper, he added. “The lower the ore grade is, the more water they use. So the older the deposit, the more water they’ll need.”"}],[{"start":null,"text":""}],[{"start":205.39999999999998,"text":"Industry body ICMM warned this week that a third of 12,000 metals and mining facilities globally were in areas experiencing “high competition for water” and at high risk of drought, and flagged Chile as a country of particular concern. "}],[{"start":219.59999999999997,"text":"An analysis this month by Jefferies found that global copper production had fallen nearly 10 per cent in the latest quarter compared with the same period last year, based on updates from miners that represent about a fifth of global mined copper supply. That increased the risk of “sizeable deficits” in the market in the next 12 months, they said. "}],[{"start":240.84999999999997,"text":"The International Energy Agency also warned last week of “mounting difficulties” in miners being able to sustain copper production at current levels in countries including Chile and Peru."}],[{"start":263.15,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1785045134_3333.mp3"}