This graphic illustrates how copper production costs have evolved for major companies from 2019 to 2023. Costs has risen sharply for most major producers due to factors like inflation, declining ore grades, and rising input costs. Notably, fuel prices surged by 350%, and sulfuric acid costs increased by over 600% in top-producing nations like Chile (source).
These cost pressures have significantly squeezed profit margins, even as copper prices peaked at $5.11 per pound in 2021. Geopolitical tensions, labor shortages, and regulatory challenges have further complicated new mining projects, some of which have seen costs soar to about $45,000 per tonne of daily installed capacity due to inflation, steadily falling grades and dropping output (source).
Rio Tinto experienced the steepest increase, with costs nearly doubling from $0.93 per pound to $1.95. Codelco followed with a 43% rise, from $1.42 to $2.03 per pound. BHP’s costs at Escondida climbed more moderately, increasing 23% from $1.14 to $1.40 per pound. Southern Copper maintained the lowest costs, rising only 17% from $0.88 to $1.03 per pound. These changes underline how inflation, ore quality, and operational challenges have reshaped the cost structure of copper mining.
While copper prices remain within profitable ranges, many companies are extending the life of existing mines rather than pursuing new projects. This trend, combined with an average lead time of over 16 years for new mines, is creating supply constraints that could drive future price increases.
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