Chile’s economy shrank by 0.2% year-on-year in the second quarter of 2026, a jarring miss against forecasts that had called for 0.2% growth. The culprit: a brutal stretch of winter storms that knocked out copper mining operations across the country’s northern and central regions, dragging down the sector that underpins roughly a quarter of global mined copper supply.
The numbers paint a rough picture
Mining output fell 6.4% in Q2, acting as the primary anchor on Chile’s broader economy. Non-mining GDP managed only a 0.7% increase, not nearly enough to offset the damage from paralyzed extraction sites.
July brought more of the same. Chile’s copper production dropped 9.4% that month as severe weather conditions continued to batter operations.
Private producers have already started managing expectations. Antofagasta cut its full-year 2026 copper output guidance to 625,000 to 655,000 tonnes. Lundin Mining lowered its forecast for its Caserones mine to 120,000 to 130,000 tonnes following storm-related outages. Combined, the two companies trimmed their projections by 35,000 to 55,000 tonnes of copper that simply won’t materialize this year.
State-owned Codelco, the country’s mining crown jewel, saw its first-half production fall 11% year-on-year to 564,000 tonnes.
Codelco’s paradox: less copper, way more profit
Codelco’s pre-tax profit surged fourfold in the first half of 2026, reaching $1.97 billion compared to just $429 million in the same period a year earlier. The company’s realized copper price hit 653.2 cents per pound in H1 2026, a level that turned production losses into financial gains.
Kast’s economic agenda faces early turbulence
President Kast was inaugurated on March 11, 2026, following his victory in the 2025 election. He entered office promising to stimulate investment and accelerate growth through deregulation and pro-business policies. Five months in, the economy is moving in the wrong direction.
The challenge is partly structural. Chile’s copper mines have been grappling with declining ore grades for years, meaning it takes more effort and expense to extract the same amount of metal.
Electric vehicles require roughly three to four times more copper than conventional cars. Chile produces roughly one out of every four tonnes of mined copper worldwide.