Aging Infrastructure, Rising Risks: The Real Copper Crisis

Two significant trends have shaped this decade:

First, renewables and the push towards electrification.

Second, the dramatic uptake of Artificial Intelligence and the infrastructure build-out to support it, like data centres.

And while global capex has surged on the back of these two mega themes, the basic commodities supporting them haven’t.

In fact, it’s gone backwards.

Ever since I started at Fat Tail over three years ago, shifting from my role as an exploration geologist, I’ve detailed the lack of investment in discovery and new mine development.

A condition that persists today, despite metal prices such as copper reaching all-time highs.

So here we have it…

Two mega themes that are both set to drive up demand for copper… Colliding with lagging investment in new supply.

But there’s another collision emerging in 2025

Two months ago, on September 8, approximately 800,000 tons of mud slid into an underground portion of the Grasberg mine.

Located in Indonesia, this is one of the world’s largest copper mines.

Tragically, it killed several workers who were trapped by the immense mud-fall that flooded a section of the underground block.

The mine operator, Freeport McMoRan (NYSE: FCX), immediately suspended operations, declaring ‘force majeure,’ releasing the operator from contractual obligations in supplying copper to its customers.

The Grasberg mine produced 816,466 tonnes of copper in 2024. That makes it the world’s second-largest copper mine.

An operation that accounts for around 4% of total global supply.

But it’s not the first…

2025 will go down as the year of copper mine failures. Here’s a timeline of what’s happened this year:

The first disaster occurred on February 18, 2025.

A tailings dam at a copper mine in Zambia, owned by the Chinese state-owned firm Sino Metals, collapsed suddenly.

Some sources state that up to 1.5 million tonnes of toxic, acidic sludge poured into a major river system in Zambia, known as the Kafue River.

The spill caused extensive environmental damage, including river contamination, fish die-offs, and disruptions to water and irrigation supplies for millions of residents across Zambia.

The company (and authorities) now face the looming prospect of major pushback against any future copper mine developments.

This in a place that was supposed to be a critically important jurisdiction for future copper supply.

And it continues…

In the wake of the Zambia disaster, on May 18, 2025, a major seismic event struck the prized Kakula mine in the DRC, owned by Ivanhoe Mines (TSX: IVN).

Extensive flooding forced the company to suspend operations.

In response, Ivanhoe’s share price collapsed almost 50 per cent from its highs.

Today, Ivanhoe continues to pick up the pieces from this disaster, pumping water out of its flagship operation in the DRC.

A major copper operation, the Kakula complex produced approximately 437,000 tonnes of copper last year.

But in the aftermath of this accident, the company’s copper output is likely to drop sharply in 2025 and beyond.

Two months later… And there was yet another disaster involving a major copper mine.

This time the world’s LARGEST underground copper mine in Chile… The El Teniente project.

In July 2025, a 4.2-magnitude earthquake struck approximately 500 meters underground, causing a portion of the tunnel to collapse.

Six workers died.

In response, the world’s largest copper producer (Codelco) suspended operations.

From Indonesia, the DRC, to Zambia, to the world’s largest copper-producing nation, Chile.

There has been an unprecedented number of mine disasters in the copper mining industry this year.

And as I outlined earlier, this couldn’t come at a worse time.

Clearly, each mining disaster will leave a lasting impact on global copper supply.

The Grasberg event alone caused copper prices to spike as the market responded to concerns about future supply.

So, was it all a Coincidence?

Not from what I can tell.

You see, many of these disasters have involved ageing operations.

For example, the Grasberg mine in Indonesia has been in operation for over 35 years.

But that pales compared to the world’s most important copper mines in Chile.

In fact, the El Teniente copper mine (which I outlined above) first began industrial-scale operations 120 years ago… Way back in 1905!

To put that in context…

The global economy remains reliant on a mine that existed BEFORE World War One.

BEFORE the age of gasoline powered cars!

And a time when electricity was just starting to be incorporated into major cities.

So, why are ageing Copper Mines a Problem?

The first reason is obvious: mines typically deplete (grades decrease) over time, as miners tap into the highest-grade portions first.

But as operators dig deeper and the network of tunnels becomes more complex and tailings ponds expand, the risks of a major accident also increase.

Deeper mines generate more seismic activity from underground blasting.

That increases the likelihood of underground tunnel collapses, such as those at El Teniente, or major mudslides, like the one at Gasberg.

Then there are the problems happening at the surface…

Tailings dams are used to contain toxic waste from spilling out into the surrounding environment.

However, as the volume of waste increases over decades of mining production, the probability of failure also increases.

Over time, the potential consequences grow.

And that’s what we’re witnessing in 2025.

Copper, does indeed have a supply problem.

So, what’s the solution for investors?

In terms of copper, focussing your attention on EXPLORERS.

In other words, the companies set to deliver the next generation of copper mines.

This is all part of an important series that I recently filmed with my publisher, James Woodburn…

The emerging opportunity in exploration stocks, especially those linked to the copper market.

And as I’ve detailed the timing is critical.

If you’d like to get access to the copper explorers I’m recommending to my readers, and watch the full presentation for free, you can do so here.

Enjoy!