Winter Storms Slash Chile Copper Output and Growth Forecasts

Severe winter storms have disrupted mining, commerce, and transportation in Chile, causing the economy to start the third quarter with weaker-than-expected data. Copper production in July fell to 403,424 metric tons, a 9.4% decrease from the previous year and the lowest output for that month since 2011. Industrial output dropped 5.1% and manufacturing production declined 4.9%, both missing analyst forecasts.

President José Antonio Kast noted that while Congress approved tax cuts and investment guarantees in July, these pro-market measures will not provide immediate growth. The economic downturn is compounded by high unemployment, which rose to 9.5% in July, and rising fuel prices. Consequently, economists have lowered 2026 growth forecasts to near 1%.

The storms forced temporary shutdowns at several major sites, including the Los Pelambres mine operated by Antofagasta Plc and the Caserones and Candelaria mines operated by Lundin Mining Corp. Both companies subsequently cut their annual production guidance. These declines follow reports from the Central Bank of Chile of a contraction in the first quarter and stagnating GDP in the second quarter.