Chile’s Antofagasta expects copper demand to defy tariff turmoil

The trade war stirred by U.S. tariffs raises a risk for metal demand, the head of Chile's Antofagasta said, although he predicted AI and other technology could offset any loss of traditional consumption caused by economic weakness.

He also said President Donald Trump's policies could lead to a more favourable environment for investment in mining.

Trump's announcement of tariffs last week, followed by retaliation from China, has caused turmoil on financial markets and sent copper prices plunging.

Antofagasta CEO Ivan Arriagada said in an interview on the sidelines of the CESCO copper conference in Santiago that he expected supplies of copper, needed for construction and the transition to a lower carbon economy, would remain in limited supply.

That meant he was more concerned about the impact on the wider economy of the trade war, which could ultimately reduce copper demand, than the resilience of the copper market itself.

Should a global economic slowdown destroy demand for copper from construction and infrastructure, Arriagada said he expected use by data centers, renewable energy and AI to compensate.

Trump has yet to announce special measures for copper, but his administration is looking into potential tariffs.

Arriagada said Chile, the world's biggest copper producer, was in a good position to avoid U.S. tariffs as the United States has a trade surplus with Chile, a free-trade partner that provides more than half of U.S. copper imports.

London-listed Antofagasta operates four copper mines in Chile and is developing a mine in the United States. It targets output of 660,000 to 700,000 metric tons this year, after producing 664,000 tons last year.

Its Twin Metals copper and nickel mine project in Minnesota needs to resolve a lawsuit over permitting, and then obtain the necessary approvals.

"In the current environment, where there is a lot more support for mining investment, it should be easier and should happen," Arriagada said, although he added there was no sign yet of progress.

As U.S. clients rushed to stockpile in many sectors ahead of Trump's announcement last week, Antofagasta sent only a small additional amount of copper to the United States, Arriagada said, without giving details.