The El Niño weather phenomenon could disrupt copper and nickel production through the start of 2027. Droughts, floods, and power outages threaten key mining regions, and not only mines but also smelters, ports, and transport will be affected. This forecast comes from BMI, a unit of Fitch Solutions.
According to NOAA’s Climate Prediction Center, strong and very strong El Niño conditions will persist through January–March 2027. The probability that the October–December 2026 period will exceed all episodes since 1950 in intensity is estimated at 83%. The phenomenon occurs every two to seven years and usually lasts nine to twelve months, but it can drag on.
The impact depends on the region. Australia and Southeast Asia become drier, South America wetter. For copper and nickel this is especially sensitive, since the main production centers lie right in the zones of greatest instability.
In Latin America, the main risk is flooding. In Chile and Peru, it can disrupt copper production and transportation. In 2017, a similar event halted operations at Anglo American’s Los Bronces and Codelco’s El Teniente mines. In Africa, the threat is the opposite: drought in Zambia and the DR Congo reduces hydroelectric output, leading to power interruptions and higher costs for energy-intensive copper smelters.
For nickel, the picture is similar. In Indonesia, drought limits water supply and creates operational risks. In September, the Morowali industrial park confirmed that several smelters had cut output because of water shortages, and it was previously reported that about 100,000 tonnes of NPI production was at risk.
Any weather disruptions this year and in early 2027 are more likely to support copper prices. For nickel, the effect will be weaker because of large inventories, unless disruptions drag on. Both markets, according to BMI, will remain in moderate surplus in 2026.
Regional differences. BMI’s country risk team considers increased aridity the main consequence of El Niño. Power interruptions are most likely where hydropower dominates. In regions dependent on monsoons, the phenomenon changes the volume and timing of rainfall, affecting the replenishment of water reserves before the dry season, and the consequences can be felt long after El Niño ends. In China, restrictions could affect the aluminum industry because of its reliance on hydropower, while in Latin America heavy rains could delay the launch of lithium projects. In countries where hydropower supplies less than 20% of electricity, such as Mexico and South Africa, peak capacity restrictions are more likely than mass blackouts.
For now, structural risks, including production constraints, falling ore grades, and policy uncertainty, outweigh the weather factor. But as the competition for critical raw materials intensifies, El Niño becomes one more adversary that has to be factored in to protect supply chains.
Source: MINING.COM
Image: BMI
