Storm in Chile disrupts copper mines and raises AI supply worries

In short: A severe storm in Chile has temporarily stopped or slowed some copper mining, adding to worries about future copper supply for data centers and other AI-related infrastructure.

What's going on

Chile has been hit by extreme weather, including flash floods and heavy snow in high-altitude areas where major copper mines operate. Officials said the storm has killed at least 13 people, and some regions declared a state of emergency.

Several mining companies reported disruptions. Lundin Mining suspended operations at its Caserones copper and molybdenum mine in the Atacama region after heavy snowfall affected power supplies. Antofagasta paused mining and processing for several days at its Los Pelambres site.

State-run miner Codelco said snow affected some operations, and work at major mines including El Teniente was temporarily halted. Companies such as Anglo American and BHP said they were monitoring the situation and speaking with Chilean authorities.

Copper is used in electricity grids, renewable energy projects, and data centers, which are large buildings filled with computers that run online services and many AI systems (like the engine room of the internet). Analysts also noted that copper stocks in London Metal Exchange warehouses have been declining, which can make prices more sensitive to disruptions.

What to watch

Experts quoted by the Financial Times said supply shocks may become more common as climate change increases extreme weather. The industry is also dealing with ageing mines that produce less copper over time, and with water stress, since lower-quality ore often needs more water to process. Together, these issues could raise costs and increase price swings, which may feed into the cost of building power and computing infrastructure.

Source: Financial Times