Codelco's decision to suspend development of the Andes Norte section at its flagship El Teniente mine could last as long as two years, according to a union leader, compounding production challenges at the world's largest underground copper mine and adding fresh pressure to an already strained global copper market. The expansion pause follows new geological studies revealing greater seismic risks than previously understood. The Chilean state-owned copper giant said the decision was made to protect workers after six months of analysis identified an emerging seismic phenomenon associated with the increasing depth of the Andes Norte project.
"The available evidence is consistent with the possible existence of an emerging risk associated with the greater depth of the Andes Norte project," Codelco said in an official statement. "These analyses have identified the existence of an emerging seismic phenomenon with characteristics different from the risks that have historically been known and managed in the operation." The Andes Norte project is adjacent to the Andesita and Teniente 7 mining areas, where a rockburst in July 2025 killed six workers and halted production across parts of El Teniente. That collapse, equivalent to a magnitude-4.2 earthquake, remains under criminal, regulatory and technical investigation.
The latest setback compounds an already difficult period for Codelco. El Teniente's copper production was approximately 27% lower year over year in the first five months of 2026, while the company's new chairman has acknowledged that its goal of returning to 1.7 million tonnes of annual copper production by 2030 is no longer achievable. Output at the company had already fallen to a 25-year low.
Chile, meanwhile, has just reported its weakest second-quarter copper production in almost two decades. The disruption adds to mounting concerns over global copper supply. Miners worldwide are pushing deeper underground as ageing operations become depleted, increasing exposure to geotechnical risks similar to those emerging at El Teniente, a century-old mine with more than 4,500 km of tunnels beneath the Andes.
Physical copper markets are tightening in parallel. CRU's latest Copper Monitor warned of a growing risk of a near-term squeeze on the London Metal Exchange, citing low on-warrant inventories, dwindling visible Chinese stocks and heavy U.S. imports ahead of a possible tariff decision. The report also noted that one market participant now controls between 50% and 79.99% of live LME copper warrants, while nearby futures positions are concentrated among a handful of long investors.
Against this backdrop, COMEX September copper climbed to an intraday record of $6.7045 per pound ($14,781 per tonne), surpassing the previous high set in May. The contract later traded at $6.683 per pound, up 0.6% on the day, 7.3% over the past month and more than 50% from a year earlier. According to The Northern Miner, copper markets are increasingly being driven by supply risks rather than demand fundamentals, with Codelco's prolonged disruption adding fresh uncertainty as inventories remain historically tight and traders continue to shift metal into the United States ahead of potential import tariffs.
Source: northernminer.com