Infographic: By-Product Credits Mask True Costs of Copper Mining
A widening two-dollar spread between the world’s cheapest and most expensive copper producers is exposing a growing vulnerability in the global supply chain.
According to data by Mining Visuals, mining companies are failing to contain their core operational expenses, relying instead on high precious metals prices and one-off production expansions to maintain their margins.
By-product credits drive cost reductions
Infographic via MiningVisuals.
This financial divergence is also occurring as copper continues to set historic market highs. Copper futures on the COMEX broke records at US$6.71 per pound on May 13, 2026, while the London Metal Exchange saw prices peak at US$14,527.50 per metric ton earlier this year.
Driving this rally is a massive mismatch between supply and demand recently exacerbated by the closing of the Strait of Hormuz, which triggered a global shortage of sulfuric acid—a critical chemical reagent needed for refining.
With the International Energy Agency (IEA) projecting a 30 percent supply shortfall by 2035, the metal has become a focal point for investors tracking grid expansions, artificial intelligence data centers, and the electric vehicle transition.
Yet, a newly compiled cost-curve analysis reveals that the industry’s apparent profitability is deceptive.
Consider Southern Copper (NYSE:SCCO), which reported the industry’s lowest net cash cost in 2025 at just US$0.58 per pound. While this represents a 34 percent drop from its 2019 baseline, the company’s underlying operating expenses actually rose to US$2.17 per pound.
The low net figure was entirely sustained by massive by-product credits, which expanded by US$0.34 per pound year-over-year on the back of higher zinc and silver output at its Buenavista concentrator.
Antofagasta (LSE:ANTO,OTCPL:ANFGF) deployed the same accounting cushion. Its net cash costs fell 27 percent to US$1.19 per pound purely because gold prices surged and its molybdenum output jumped 48 percent.
Other producers also relied on sheer volume to temporarily dilute their fixed overheads. Year-over-year, Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) slashed its 2025 net unit costs by 53 percent to US$0.67 per pound (a 27.96 percent drop against 2019), leaning heavily on a 61 percent production spike at its massive Oyu Tolgoi underground development in Mongolia.
Meanwhile, BHP (ASX:BHP,NYSE:BHP,LSE:BHP) followed suit at Escondida, lowering unit cash costs by 18 percent year-over-year to US$1.19 per pound by mining its highest-grade ore bodies in 17 years.
Base extraction costs and inflation
Where these windfalls were absent, cost lines bloated immediately against historical baselines.
Chilean state giant Codelco watched its C1 cash costs climb to US$2.08 per pound, representing a 46.89 percent increase since 2019, due to high equipment rental fees, unexpected maintenance, a seismic event at…
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