ByCharles Kennedy– Feb 26, 2025, 1:24 AM CST
A massive power outage in Chile has hit copper production in the world’s biggest exporter as it plunged the capital city of Santiago into darkness, prompting the declaration of a state of emergency.
The outage was caused by a transmission line failure, Reuters reported, citing the Interior Minister of Chile, who also ruled out a cyberattack, the report said.
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Among the copper operations affected by the outage was Escondida, the world’s largest, with Chile’s state copper major Codelco saying that all of its mines had suffered interruptions as a result of the outage. The miner added that it was using backup generators to keep partial operations at the mines.
Copper, one of the most widely used basic metals globally, has recently acquired additional significance because of its essential role in the energy transition. There is copper in pretty much everything transition, from EVs to wind turbines to chargers, to solar installations. For this reason, many have been warning of an impending shortage because demand projections significantly exceed output forecasts.
There is an additional challenge in the fact that the production of copper has become costlier in terms of yield per ton of ore. That yield has been in decline as the most abundant deposits in the world get depleted and miners need to process a lot more ore to get the same amount of copper as 30 years ago.
Yet even with the bullish projections for copper demand, copper miners have steered clear from a swift mine expansion—because the transition has been stumbling and those demand projections have consistently failed to materialize to any degree. Indeed, some have even spoken of copper oversupply, further sapping miners’ potential appetite for production expansion.
Still, copper remains a vital commodity and the interruption of supply in the world’s biggest miner will likely have an effect on international prices, although likely temporary. Had the blackout lasted longer, copper prices would have seen a bigger and more lasting impact.
By Charles Kennedy for Oilprice.com
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