More than half of the refined copper imported by the world’s largest economy is produced by mining companies in Chile.
By Patricia Marchetti
President Donald Trump’s threat to impose tariffs on copper imports was met with caution by Chile’s copper industry, the world’s leading producer of the metal.
The Republican leader made the warning without specifying how, to whom, or when the measure would be applied. However, analysts anticipate that such a policy would not only affect Chilean exports but also expose the US to its own limitations in replacing imported copper.
But who are the main Chilean exporters that supply the North American market? Between January and November 2024, Chile exported 544,000 tons of cathodes to the US, valued at $5.08 billion, with a free on board (FOB) price of $4.24 per pound.
According to data from Plusmining, Codelco accounted for 45% of this total, followed by Minera El Abra (controlled by US-based Freeport McMoRan, in which Codelco holds a 49% stake) with 14%. BHP’s Escondida and Spence mines exported 11% and 9% of the total, respectively.
Sources close to Codelco told DF that they are closely monitoring the situation but still view it as something “lacking form or substance.” They also warned that the US is a major importer of this commodity, and implementing tariffs would require a clear plan to increase domestic production.
According to the US Geological Survey, the country produced 1.1 million tons in 2023 while consuming a total of 1.8 million tons. That same year, imports reached 890,000 tons—570,000 of which came from Chile—resulting in a net import dependency of 45% for apparent consumption, up from 41% in 2022.
Former Codelco CEO Marcos Lima stated that while Chilean refined copper exports are important for the US market, “it is clear that they are much more oriented toward China. In another era, these potential tariffs would have been very serious, but today they are not.”
According to ProChile figures, in 2024, the United States accounted for 11.3% of Chile’s copper exports, while China represented 53% of the total.
Álvaro Merino, executive director of Núcleo Minero, recalled that since January 2004, the Free Trade Agreement (FTA) between Chile and the US has been in force, stating that “neither party may increase any customs duty on an originating good. If one party believes the other has violated the agreement, the dispute must be referred to Chapter 22 on dispute resolution.”
Regarding the potential impact of tariffs on companies like Freeport—which is US-based but also produces copper in Chile—Juan Carlos Guajardo, executive director of Plusmining, analyzed that they would face a dual scenario: “Their domestic operations would benefit from a possible increase in internal market prices, but Freeport’s mines in Chile, Peru, or Indonesia would lose competitiveness when exporting copper to the US. These companies would need to reevaluate their supply chains and prioritize local production to meet domestic demand. However, US production capacity is insufficient to replace imported copper, meaning there would be an adjustment period.”
DF inquired about Trump’s threats and their potential impacts with BHP, Freeport, and Anglo American, but they declined to comment.
Twin Metals y Resolution
The potential tariffs could shed light on projects like Twin Metals, owned by Antofagasta Minerals in Minnesota, and Resolution Copper, a joint venture between Rio Tinto and BHP in Arizona, both of which have faced regulatory challenges and community opposition for years.
“It is very likely that Trump will attempt to unblock permits and fast-track the approval of these projects. However, the process faces legal and environmental hurdles that make short-term implementation difficult,” Guajardo stated. Merino agreed, noting that “it is highly likely that incentives will be created to accelerate their development.”
Source: Diario Financiero