Rising Copper Volatility & Capital Discipline Shift Investor Focus to Execution-Ready Developers

• Global copper inventories have risen above 1.1 million tonnes in early 2026, even as long-term forecasts point to a structural supply deficit of roughly 10 million tonnes by 2040.
• Meeting projected demand will require more than $210 billion in new copper investment by 2035, nearly three times the $76 billion deployed over the past six years.
• Capital markets are becoming more selective, favoring projects with low capital intensity, advanced permitting, and clear paths to near-term cash flow.
• Development timelines averaging about 17 years from discovery to production are reinforcing investor preference for execution-ready assets.
• Chinese miners accounted for roughly half of global copper investment between 2019 and 2025, while Western miners have increasingly relied on acquisitions rather than new mine construction.
• Rising capital costs, up about 65% for new Latin American supply since 2020, are intensifying the focus on capital discipline and project economics.
• Case studies across the sector show clear execution-risk differences between advanced developers and earlier-stage explorers.
• The question has shifted from commodity exposure to execution credibility, with capital flowing toward companies that can deliver financing, permitting, and construction milestones on schedule.

Volatility Is Reshaping Copper Market Dynamics

Global copper inventories have risen sharply in early 2026, underscoring a widening gap between short-term market conditions and long-term supply expectations. Combined stocks across the London Metal Exchange, Shanghai Futures Exchange, and CME have climbed above 1.1 million tonnes for the first time since 2003. Exchange inventories have increased by roughly 300,000 tonnes since the start of January, reflecting softer manufacturing demand and sustained inflows into major trading hubs.

Yet the longer-term outlook still points to structural constraints. S&P Global Market Intelligence projects that copper supply could fall 10 million tonnes short of demand by 2040, equivalent to about 23.8% of projected consumption even as recycling volumes increase. Goldman Sachs Research expects the market to remain in surplus through 2026, forecasting a 500-kilotonne surplus in 2025 and a smaller 160-kilotonne surplus in 2026, before demand begins to outpace supply later in the decade.

Closing that gap will require a significant acceleration in capital deployment. Wood Mackenzie estimates that more than $210 billion in new copper investment will be needed by 2035, compared with approximately $76 billion invested over the previous six years. Roughly half of the capital deployed between 2019 and 2025 came from Chinese mining companies.

At the same time, project economics are becoming more challenging. The International Energy Agency estimates that capital expenditures required for new Latin American copper supply have risen by about 65% since 2020. Development timelines remain lengthy, with industry data indicating that the average copper project takes roughly 17 years to move from discovery to first production, reflecting permitting, financing, and construction complexities.

The Critical Path: What Developers Actually Need to Deliver

Execution risk in mining is shaped by key milestones from study to production. Permitting is the first major hurdle, with timelines varying widely by jurisdiction. S&P Global data suggest the average copper project takes about 17 years from discovery to first production due to combined permitting, financing, and construction challenges.

Even mature jurisdictions face operational risks. Chile’s state miner Codelco is targeting about 1.39 million tonnes in 2025, up from roughly 1.33 million tonnes in 2024, as it recovers from a 25-year low caused by declining grades, delays, and disruptions.

Financing and capital intensity are the next major factors. New copper mines often require billions upfront, and Wood Mackenzie estimates over $210 billion in global investment will be needed by 2035, versus about $76 billion in the prior six years. Lenders now stress-test projects at copper prices 20-30% below forecasts

Construction timelines, infrastructure, and social or technical disruptions also affect supply, as seen in setbacks in countries like Peru and Indonesia. Metallurgy further influences costs: oxide heap-leach projects generally need less capital than sulphide operations with concentrators. Industry data suggest about 6.4 million tonnes of copper capacity, over a quarter of current global output of around 23 million tonnes, are stalled due to environmental, social, and governance factors.

Marimaca Copper: Financial Health & Positioning

Marimaca Copper’s flagship Marimaca Oxide Deposit (MOD) in Chile’s Antofagasta region ranks among the more advanced and economically attractive development-stage copper projects globally. The company’s August 2025 definitive feasibility study outlines a 13-year mine life producing approximately 50,000 tonnes of copper cathode annually. The study delivers a post-tax net present value of about US$1.1 billion and an internal rate of return of 39% using a long-term copper price of US$4.30 per pound. Initial capital of roughly US$587 million translates to capital intensity of approximately US$11,700 per tonne of annual production capacity.

The project’s oxide heap-leach processing route provides structural capital and operating advantages compared with sulphide developments that require concentrators and smelting infrastructure. These characteristics underpin the project’s relatively low strip ratio of 0.8:1 and strong forecast operating margins, with feasibility study estimates indicating EBITDA margins of roughly 58% during steady-state production years.

A key de-risking milestone was achieved in November 2025 with the receipt of Chile’s Resolución de Calificación Ambiental (RCA), the project’s principal environmental approval. This approval positions the MOD among a limited group of advanced copper development projects globally and enables the company to move toward a final investment decision targeted within 12 to 18 months.

Infrastructure access further reduces execution risk. The project sits within Chile’s established Antofagasta mining corridor, approximately 25 kilometres from the Port of Mejillones, and benefits from access to grid power, industrial water solutions, and established transportation networks. The company plans to use recycled seawater and renewable electricity to support ESG-aligned operations in the water-constrained Atacama Desert region.

Hayden Locke, Marimaca Copper’s Chief Executive Officer, highlights the project’s economic profile following the definitive feasibility study:

“We delivered the DFS…confirmed what we already knew, which is industry-leading capital costs, very competitive operating cost, industry-leading return on invested capital metrics.”

He also emphasized the significance of the environmental approval for advancing the project:

“We’re now permitted. So we’ve got our environmental approval which is a huge milestone. It really positions us to be in a position to start construction sometime during the course of 2026.”

Primary execution risk centers on construction financing, with the company advancing discussions with lenders and strategic partners ahead of a targeted final investment decision. The emerging sulphide potential at Pampa Medina offers longer-term growth optionality, although it would require additional processing infrastructure and higher capital intensity than the oxide phase.

Fitzroy Minerals: Exploration Leverage vs. Execution Visibility 

Fitzroy Minerals is a copper-focused explorer advancing two projects in Chile’s established mining regions. Its strategy combines the shallow oxide system and deeper sulphide potential at Buen Retiro with the district-scale Caballos sulphide discovery, providing exposure to copper, molybdenum, gold, and rhenium. Chile, which produces about one-quarter of global copper, offers strong infrastructure and a long mining history.

Recent drilling at Buen Retiro has expanded the oxide zone and confirmed deeper sulphide potential. The project sits within the Coastal Cordillera IOCG belt near producing mines like Manto Verde and Candelaria, and is being advanced toward an initial resource estimate in the first half of 2026.

President and Chief Executive Officer Merlin Marr-Johnson describes the exploration progress:

"We have now extended Buen Retiro's strike length by approximately 40 percent, proving both scale and continuity in the Southwest Area."

The company is also evaluating pathways to near-term production:

“The Company is investigating the potential for fast-track production at Buen Retiro, starting with a PEA and associated maiden resource estimate to be completed in 2026.”

Strengths include commodity diversification across two projects and exposure to both oxide and sulphide development paths. Chile’s established infrastructure and permitting system also support efficient exploration. However, the company remains at an early stage, with no formal resource or economic study yet, leaving valuation dependent on continued drilling success and resource definition.

Where Execution Risk Still Sits in the Sector

Across the sector, execution risk declines as projects advance from exploration to production. Explorers rely on repeated capital raises, while producers can fund growth through operating cash flow.

Marimaca Copper sits in the middle. Engineering progress and environmental approvals have reduced permitting risk, but construction financing remains the key hurdle before a final investment decision. Strong economics support financing efforts, though capital availability still depends on market conditions.

Jurisdiction also matters. Chile’s established mining framework and infrastructure help reduce development risk, while more complex permitting regimes can extend timelines. Exploration-stage companies like Fitzroy Minerals carry the highest risk, as they must still define resources and complete economic studies. Valuations typically rise along this path, with producers commanding the highest multiples due to cash flow.

How Capital Discipline Is Reshaping Valuations

Capital markets now favor projects with lower capital intensity, shorter timelines, and clearer paths to cash flow. Higher rates and tighter financing have reduced appetite for large, long-build projects.

Despite this, mining equities have rallied. MSCI’s Metals and Mining Index has risen nearly 90% since early 2025, while copper prices are up about 50%. Investors are rewarding capital-efficient companies that meet development milestones, while projects needing large financings face higher dilution risk.

Cost discipline is under greater scrutiny, with investors demanding detailed assumptions and sensitivities. Low-cost projects typically earn valuation premiums, and even after the rally, parts of the sector still trade below long-term valuation averages.

The Investment Thesis for Copper & Gold Developers

• Long-term forecasts support a structural copper deficit. S&P Global estimates supply could fall about 10 million tonnes short of demand by 2040, or roughly 24% of projected consumption, even with more recycling.
• Meeting demand will require major investment. Wood Mackenzie estimates over $210 billion will be needed by 2035, versus about $76 billion spent in the prior six years, while lenders now stress-test projects at prices 20-30% below forecasts. As a result, capital markets favor advanced, lower-capex projects with realistic timelines and shorter paybacks.
• Producers with operating cash flow have an advantage because they can self-fund growth, while developers remain more exposed to financing cycles. Jurisdiction also matters more in volatile markets, with established regions offering lower execution risk.
• Project design and metallurgy influence capital intensity. Heap-leach oxide projects typically require less upfront capital than complex sulphide operations, but costs are rising. The IEA estimates capex for new Latin American copper supply has increased about 65% since 2020.
• Investment trends are shifting as well. About half of the $76 billion spent on new supply from 2019 to 2025 came from Chinese miners, often in higher-risk regions, while Western M&A has mostly reshuffled existing reserves rather than adding new production.

The contrast between rising inventories in the short term and long-term supply deficits reinforces the importance of project delivery rather than commodity narratives alone.

Companies advancing projects through financing, permitting, and construction milestones are positioned to outperform peers with comparable resources but higher execution risk. With development timelines averaging roughly 17 years from discovery to production, projects progressing through critical stages today are positioned to benefit from tightening supply conditions expected later in the decade.

In this environment, equity performance is likely to be driven less by commodity price movements alone and more by each company’s ability to advance projects toward production on schedule and within budget.

TL;DR

Long-term forecasts point to a major copper supply shortfall by 2040, requiring more than $210 billion in new mine investment. With financing conditions tightening, capital is flowing toward projects that are low cost, permitted, and close to production. Producers with cash flow have a structural advantage, while development-stage companies face greater funding risk. Jurisdiction, metallurgy, and capital intensity are becoming key valuation drivers, as investors prioritize execution-ready assets over high-risk, capital-heavy projects.

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