Cochilco: Limited Copper Concentrate Supply Challenges Growing Smelting Capacity

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Copper smelters are scrambling for copper concentrate amid mine disruptions, suspended operations and export restrictions.

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Disruptions

The Chilean Copper Commission (Cochilco) released a report highlighting the rapid expansion of smelting capacity, negative treatment and refining charges, geographic concentration and limited copper concentrate supply.

Global copper smelting capacity stood at 31.2 million tonnes in 2025 and could increase to 41.3 million tonnes through planned projects by 2041, according to Cochilco. About 59% of the expansion is expected to occur in Asia, with China and India leading the expansion, while Saudi Arabia is expected to drive growth in the Middle East.

These new smelting projects could add up to 8.2 million tonnes of copper production capacity by 2041.

Industrial Info Resources data show 227 primary copper smelting projects worldwide amounting to investments of US$28.20 billion. Of those, a total of 19 projects representing US$8.43 billion in investments are grassroot developments.

Chinese dominance extends beyond smelting capacity, with the Asian giant accounting for 47% of the 19.50 million tonnes of global smelted copper output in 2025. In 1990, China accounted for only about 4% of the global smelted copper output.

However, smelters are increasingly dealing with a tight copper concentrate supply, which has become a core constraint in the market. Operational disruptions in key mines such as Grasberg in Indonesia, Kamoa-Kakula in the Democratic Republic of Congo, and El Teniente in Chile, together with the closure of Cobre Panama in Panama, have limited copper concentrate availability in the international market.

In addition to these disruptions, declining ore grades, project delays and copper concentrate export restrictions in Indonesia are making it even harder for smelters to secure feedstock, based on Cochilco's analysis.

At the same time, countries like Congo and Indonesia have increased domestic processing as a way to add value locally, but reducing the amount of concentrate available for exports. In integrated operations, copper is also processed by smelters owned by the same company instead of being offered to third parties.

This, according to Cochilco, is creating a structural imbalance between smelting capacity and available feedstock, pushing spot treatment and refining charges (TC/RCs) into negative territory in 2026.

This means custom smelters that rely on third-party concentrate can pay miners to secure feedstock rather than receive a fee charge for processing it. For 2026, the fixed annual TC/RC benchmark has been set at US$0 per tonne, while the spot TC/RC price has reached a historic low of -US$125 per tonne.

With TC/RC revenues at zero or negative, smelters depend on recovering copper above payable levels, as well as credits from byproducts such as gold and silver, which have reached peak prices in recent times.

Additionally, production of sulfuric acid, an output of copper smelting, has become another key source of revenue for smelters. Sulfuric acid production has received greater importance amid strong demand, price volatility, logistical disruptions and higher transport costs, according to Cochilco.

Key Takeaways

• Copper smelting capacity is expected to increase from 31.2 million tonnes in 2025 to 41.3 million tonnes in 2041.
• Copper concentrate supply shortages are keeping the smelting market tight and forcing smelters to compete for feedstock.
• The 2026 fixed TC/RC benchmark is US$0 per tonne, while the spot TC/RC has reached a historical low of -US$125 per tonne.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).