Over 25% of global copper supply trapped by ESG roadblocks — study

A GEM Mining Consulting report reveals that 6.4 million tonnes of global copper capacity are stalled by ESG challenges, with Peru, Chile, and the US most affected.

A new report has revealed that more than a quarter of the world’s copper production capacity is currently stalled or suspended due to environmental, social, and governance (ESG) issues, posing a major challenge to the global energy transition.

According to GEM Mining Consulting, about 6.4 million tonnes of copper — roughly 25% of global mine output — are locked behind ESG-related barriers. Unlike geological or technical constraints, these bottlenecks stem from conflicts over environmental protection, community relations, and governance failures that could be mitigated through more transparent engagement and sustainable practices.

“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.

Top Producers Affected

Peru leads the list with around 1.8 million tonnes of copper capacity on hold — equivalent to nearly 31% of the total stalled supply. If these projects were restarted, Peru could reclaim its position as the world’s second-largest copper producer, surpassing the Democratic Republic of Congo.

The United States follows with about 0.8 million tonnes, while Chile accounts for 0.7 million tonnes, and Argentina and Papua New Guinea (PNG) each have roughly 0.6 million tonnes idled.

In Chile, reactivating these projects could finally break the country’s long-standing production ceiling of 5.5 million tonnes per year, potentially boosting annual output beyond 6 million tonnes and solidifying its global leadership in copper production.

Three Case Studies Highlight the ESG Challenge

Of the 33 projects identified as paralyzed by ESG factors, GEM highlights three emblematic examples: La Granja (Peru), Resolution Copper (US), and El Pachón (Argentina).

La Granja, owned by Rio Tinto and First Quantum Minerals, has faced public opposition over environmental concerns and land use since 2006. Despite being the world’s fifth-largest undeveloped copper deposit, distrust and regulatory delays continue to block progress.

In Arizona, the Resolution Copper project — also backed by Rio Tinto — has been stalled for over 20 years due to opposition from Indigenous and environmental groups defending the sacred Oak Flat site.

El Pachón, controlled by Glencore, has struggled under Argentina’s glacier-protection laws and permitting issues. However, the new RIGI regime under President Javier Milei may offer a fresh path toward development.

The report notably omits First Quantum’s Cobre Panamá, one of the world’s largest copper mines, which has been idle since November 2023 following a Supreme Court ruling that voided its operating contract. Before its closure, Cobre Panamá produced 350,000 tonnes of copper annually, contributing about 5% of Panama’s GDP.

A Perfect ESG Storm

Perhaps the most striking example of ESG conflict remains Panguna in Papua New Guinea. Once one of the world’s biggest copper-gold mines, it was shuttered in 1989 after a violent civil war triggered by disputes over environmental damage, resource sharing, and Indigenous rights. More than 30 years later, redevelopment is still uncertain.

Faúndez cautions that while some stalled projects may eventually move forward, many remain frozen for years, disconnected from the accelerating demand for copper in electrification, renewable energy, and digital infrastructure.

“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 concluded.