El Niño: another test for an already tight copper market

What is El Niño and why does it matter?

El Niño is a recurring climate pattern that can raise global temperatures and change rainfall patterns around the world. The September forecast points to a “very strong” El Niño, with a 75% chance of being the strongest since records began in 1950 [1].

For mining companies, those changing weather patterns can directly affect production. Excess rainfall can disrupt mine operations, while drought and higher temperatures can put pressure on water and hydropower availability. Crucially, the effects vary significantly by location.

What are we monitoring?

The effects of El Niño can differ within countries, making mine-level weather and operational data particularly important.

Chile and Peru: Excess rainfall can disrupt copper mines and associated infrastructure. In Chile, current forecasts indicate heavy rainfall in central regions through November 2026. Around 1.3 million tonnes of annual copper production is exposed to current rainfall projections, based on 2025 production [2]. There is also a tail risk that heavier rainfall could move north towards the Atacama Desert, where more copper production could be affected.

Zambia and the Democratic Republic of Congo: Here the risk is different. Higher temperatures and drought can constrain hydropower availability, which is important for energy-intensive mining operations. Water levels have recovered significantly from previous lows, but a prolonged El Niño could reverse that improvement.

Grasberg, Cntral Papua: El Niño can also have positive effects in some locations. Reduced rainfall at Grasberg has supported de-watering work required following rain and mudflow disruption over the previous 12 months.

Why is copper is particularly important?

El Niño comes at a time when the copper market is already tight. Global mine supply continues to disappoint, while permitting challenges, skilled-labour shortages, higher costs and long project development timelines are making it difficult to bring new supply to market. Chinese inventories are also exceptionally low.

At the same time, longer-term demand remains supported by copper’s traditional uses alongside electrification, electric vehicles and investment in electricity grids.

El Niño therefore matters because it adds another potential constraint to an already challenged supply picture, ultimately putting upward pressure on copper prices.

What does this mean for Future Minerals?

Copper remains the largest commodity exposure in our Future Minerals strategy, and we continue to see a compelling long-term outlook. A stronger copper price creates opportunities for active managers to invest in mining companies positioned to benefit. 

However, a higher copper price does not benefit every miner equally. A company affected by disruption may lose production, while a producer that maintains output can benefit from a tighter market and stronger pricing.

We focus on using mine-level weather and operational data to identify the more resilient producers. Alongside this selective approach, investing across minerals, geographies and different parts of the value chain reduces our dependence on any single commodity, region or outcome.

Final thoughts…

El Niño is a reminder that the opportunity in critical minerals depends not only on growing demand, but also on the difficulty of delivering supply. For investors, the distinction matters: recognising the risks to production helps us identify where the opportunities lie.

[1] Source: NOAA Climate Prediction Center’s September 2026 ENSO Diagnostic Discussion.

[2] Source: ECMWF Seasonal Forecast System, 2026