A strong El Nino could disrupt copper and nickel production through early 2027, as droughts, flooding and power shortages threaten major mining regions, according to BMI, a unit of Fitch Solutions. NOAA’s Climate Prediction Center said in its October update that strong to very strong conditions were likely to persist through January to March 2027, with an 83 percent probability that the event over October to December 2026 would exceed the intensity of previous episodes dating back to 1950, a probability the EIA cited independently in its Colombia analysis the same day.
The exposure runs in opposite directions by region. In Latin America the risk is water in excess: flood risk in Chile and Peru could hit production and transport at major copper operations, and a previous El Nino in 2017 halted operations including Anglo American’s Los Bronces and Codelco’s El Teniente. In Africa the risk is water in deficit: drier conditions in Zambia and the Democratic Republic of Congo could cut hydropower generation, triggering electricity shortages and raising costs for energy intensive copper smelters.
Nickel’s exposure is Indonesian. Drought related water constraints can hit production before the wet season returns, and in September the Morowali Industrial Park confirmed several smelters had reduced output amid water shortages, with earlier reports indicating about 100,000 tonnes of nickel pig iron production could be affected. BMI also flags China’s aluminium sector, which relies on hydropower in some producing regions, and heavy rainfall risks to lithium operations in Latin America.
BMI’s own calibration is measured. It expects structural supply risks, declining ore grades, operational constraints and policy uncertainty, to overshadow the weather disruption for now, sees weather disruptions as more supportive for copper prices than for nickel given nickel’s substantial inventory overhang, and expects both markets to remain in modest surplus in 2026. The warning is therefore about volatility at the margin, not a forecast shortage, and it arrives in a copper market where prompt premiums are already near records.