ESG obstacles immobilize 25% of global copper supply, says consultancy
As the international community accelerates its transition toward renewable energy and digital infrastructure, a significant paradox has emerged within the mining sector: More than a quarter of the total global output of copper remains inaccessible because of complications related to ESG, according to a study from GEM Mining Consulting.
This massive volume of production – amounting to around 6.4 million tons of copper – is not restricted by actual resource scarcity or technological limitations. Rather, it is currently held in a state of paralysis by a complex web of environmental, social, and governance (ESG) challenges.
These impediments have created a profound supply-demand imbalance at a time when the electrification of the global economy requires unprecedented quantities of the material.
“Countries like Chile, Peru, and the United States hold some of the largest copper reserves now off the market. Unlocking even a fraction of these projects could help ease looming supply shortages,” said Patricio Faúndez, head of economics at GEM Mining Consulting.
Peru and Chile in the spotlight
The geographical distribution of these idle assets highlights the extent of the crisis among major producers. Peru currently maintains the largest share of untapped potential, with roughly 1.8 million tons of annual capacity – nearly 31% of the total stalled supply – remaining offline.
Should the Peruvian government and industry stakeholders resolve these local conflicts, the nation could potentially reclaim its status as the second-largest copper producer on the planet, surpassing the Democratic Republic of Congo with a total output exceeding four million tons.
Similarly, Chile has struggled for decades to surpass a production ceiling of 5.5 million tons. Unlocking its suspended projects could finally propel the country beyond the six-million-ton mark, further cementing its position as the global leader in copper supply.
Blocked copper in the US
In the United States, where copper was recently designated as a critical mineral, approximately 800,000 tons of capacity are currently held up. The resolution of these domestic bottlenecks is increasingly viewed as a matter of national security, as it would significantly decrease reliance on foreign imports and stabilize the internal supply chain for advanced technologies.
However, long-standing disputes stand in the way of extraction. A primary example is the Resolution Copper project in Arizona, which has been delayed for 20 years in total. This specific site is caught in a legal and social quagmire involving indigenous rights and environmental protections for the sacred Oak Flat area, illustrating the difficult balance between industrial necessity and cultural preservation.
Other blocked projects
The landscape of stalled projects also includes high-profile assets in South America and the Pacific. In Argentina, the El Pachón site has faced significant hurdles related to glacier protection laws, though recent legislative incentives under the current administration may provide a new path toward development.
Meanwhile, the Cobre Panamá mine remains a cautionary tale of how quickly a major contributor to the global market can vanish. Once responsible for 5% of Panama’s national gross domestic product, the facility was shuttered following a supreme court ruling that declared its operating contract unconstitutional.
While a comprehensive audit is currently underway in early 2026 to explore a potential restart, the suspension continues to deprive the market of about 350,000 tons of copper annually.
Conflict in Papua New Guinea
Perhaps the most enduring example of these conflicts is found in Papua New Guinea at the Panguna mine. Shuttered since 1989 following a violent civil conflict sparked by disputes over environmental damage and the distribution of wealth, the site remains a stark reminder of the consequences that follow when community engagement and governance fail.
Faúndez argues that the path forward requires more than just capital investment. While solutions may not be easy, there must be a way forward to boost production while also focusing on ESG.
“Rebuilding trust with local communities, enforcing stronger environmental standards, and stabilizing governance will be key to unlocking the copper supply essential for the energy transition,” he noted.
Without a fundamental shift in how mining entities engage with local populations and governments, a significant portion of the world’s mineral wealth will likely remain underground.
