BHP resumes Escondida operations as global copper inventories remain low

BHP has begun the gradual resumption of operations at its Escondida mine in Chile, the world’s largest copper producer, following a fatal accident that temporarily halted activity. The restart occurs at a critical time for the global market, where tight inventories and robust demand continue to exert pressure on supply chains. The company stated that it is carefully assessing conditions for the return to full activity, prioritising workforce wellbeing, operational readiness, risk controls and compliance with applicable authority requirements.

The interruption to production coincided with a period of heightened volatility in copper prices. COMEX copper reached a record high of $6.83 per pound before easing to $6.76 per pound on Friday morning. Escondida mine president Alejandro Tapia confirmed the fatality on Thursday. The mine, located in the Atacama Desert approximately 170 km southeast of Antofagasta, produced about 1.3 million tonnes of copper in BHP’s 2026 financial year. BHP operates the site and holds a 58.5% stake, while Rio Tinto owns 30% and Japan-based JECO Corp. retains the remaining 12.5%.

Market analysts indicate that the timing of the restart highlights the lack of a significant supply cushion in the copper market. Chinese inventories are near cyclical lows as the country enters a period of consecutive public holidays. Shanghai Futures Exchange stockpiles stand at approximately 47,000 tonnes, according to BMO Metals. These levels are low ahead of the Mid-Autumn Festival from 25 to 27 September and the National Day Golden Week from 1 to 7 October. Although these holidays are expected to temporarily pause restocking by Chinese consumers, BMO noted that recent price declines have been shallow and short-lived because fabricators cannot defer purchases for extended periods.

Underlying supply data further underscores the tightness in the market. The International Copper Study Group reported that global mine production was running at an annualised 23 million tonnes in July, a 4% decrease from June. In contrast, refined demand rose 3% year-on-year to an annualised 29 million tonnes, while refined supply slipped 1% to 28.4 million tonnes. This gap implies that refined consumption exceeded supply during the month, contributing to copper’s price resilience. Escondida plays a disproportionate role in this balance, as BHP produced about 2 million tonnes of copper across its portfolio in the latest financial year. Copper generated more than half of the miner’s underlying EBITDA for the first time, and the company is planning a new concentrator at Escondida as part of a pipeline that could lift group copper output by about 40% by fiscal 2035.