LME copper's move above $14,500/tonne is often linked to AI, grid and
electrification demand, but a deeper supply constraint is falling ore grades.
BHP said Escondida set records for mined and milled tonnage in the first nine
months of FY2026, yet copper production fell 3% as head grade declined from
1.05% to 0.91%. Lower grades force miners to process more rock and consume more
energy and inputs to sustain output. IEA data show average global copper ore
grade is about 40% lower than in 1991; capital intensity for existing mine
expansions has risen ~65% since 2020. Just 5% of copper resources discovered in
the past 35 years were found in the last decade, and new projects take roughly
17 years from discovery to production on average. Market signals are tightening:
annual concentrate treatment charges for 2026 have fallen to zero and spot TCs
are negative, indicating smelters have spare processing capacity while available
concentrates are limited.
