Chile is being hit by a severe winter storm, classified as a Category 5 atmospheric river, causing significant disruption. As of Tuesday, the storms have led to 13 fatalities and 7 people missing. Authorities report that 2,281 people have been displaced, 81 homes destroyed, and an additional 2,761 homes severely damaged. Power outages are widespread, affecting 87,000 people, prompting the government to consider disciplinary action against electricity distributors for service delays. Schools have also been suspended in several regions.
The storm's impact extends to Chile's crucial copper industry, though major mining operations are primarily in the less-affected northern regions. Despite this, some mining activities have temporarily scaled back. The government has convened emergency talks with mining representatives to coordinate responses and ensure infrastructure availability. While the country's main copper export terminals remain largely operational, the storm exacerbates existing supply concerns. Antofagasta reported a 9.5% drop in first-half copper output to 285,000 tonnes, BHP expects declining Chilean output next year, and the IEA warned of a "considerably worsened" near-term outlook for the copper market due to sulphuric acid supply constraints.
The copper market is facing a complex situation. Copper for September delivery settled little changed at $6.342 per pound ($13,980 a tonne) on Comex, but later slid 1.1% to $6.27 per pound in evening trade. This movement was influenced by an escalation in US-Iran hostilities, which triggered a broader selloff in metals, though copper's decline was somewhat mitigated by the ongoing supply risks from the Chilean storm. The most active contract is now trading about 6% below its early June all-time high of over $6.60 a pound.
Chile's government cut its 2026 economic growth forecast to 1.8%, citing Middle East conflict uncertainty, but raised its 2026 copper price assumption to $5.90 per pound from $5.46. Despite the storm's intensity, government officials state that no major damage, collapses, or significant impacts have been reported at any mining installations that would risk their integrity or the surrounding environment. Industry experts suggest the impact on national copper production will be "limited," though the National Mining Society (Sonami) called for an "extraordinary support plan" for small producers affected by the weather.
