As Copper Prices Rise, Not All Industry Players are Striking Gold

The booming market for copper doesn’t appear to be slowing down anytime soon as mine supply exhibits a structural limitation while demand from artificial intelligence infrastructure climbs to new highs. These market conditions have prompted the World Bank to raise its 2027 price forecast to $13,000 a ton, a figure that’s 18% higher than the forecast the institution published months ago in April. However, not every industry segment is benefiting from this boom.

A case in point is the sharp contrast between how copper miners and copper smelters in China are faring. China provides a good case study because the country is both the largest global market for refined copper and home to at least half of worldwide copper smelting and processing capacity.

China therefore best illustrates how the fortunes of miners are counter to what smelters are experiencing. Miners are having a great time because the rate at which global copper prices are increasing is a lot higher than the pace at which mining costs are rising.

Zijin Mining, the largest copper miner in China, has an average unit cost per ton of $3,139 while the sales price of each ton of copper has averaged $8,970 per ton. These figures show that the firm has been earning an average margin on its sales of 65%. That was in Q1 of 2025. In Q1 2026, the margin increased to 71%. As the miner keeps its production costs low, its margin is bound to rise even higher as global market prices of the refined metal climb.

The massive cash returns that Zijin Mining is getting from its operations have allowed the firm to expand its operations to overseas markets, growing its global footprint and expanding China’s dominance in the extraction of this critical metal.

On the other side of the spectrum, Chinese smelters are having it rough. These companies’ revenue is strongly dependent on the fees they charge miners who bring their concentrate for processing. Those fees plummeted to zero in 2026 after smelting capacity in the country grew at a much faster pace than the pace at which mining capacity was growing. In some cases, smelters have had to pay miners so that they can have concentrate to process.

Such negative fees have squeezed smelters, and they now depend on earnings from the other metals like gold that they can retrieve from the copper concentrate they process. The earnings from those “stray” metals used to be a bonus for smelters; now they are the sole income of these firms. Many with less advanced processing equipment are unable to retrieve these other metals from copper concentrate, and they are closing shop.

The fact that mining firms are getting a windfall puts copper exploration companies like Numa Numa Resources Inc. in a very good position to attract investment capital as the demand for copper doesn’t show signs of slowing down anytime soon.

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