Core Viewpoint - The Mantoverde copper-gold mine in Chile is facing a strike risk due to stalled labor negotiations, which may impact copper supply growth in 2026. This situation, combined with high copper prices, highlights the intensifying labor-capital conflict in the global copper mining sector, potentially becoming a hidden risk in the supply chain [1][2]. Group 1: Supply Risk and Labor Negotiations - The Mantoverde copper mine's union has indicated that if worker demands for salary increases and improved working conditions are not met in the new labor contract, an indefinite strike may commence. Negotiations have been ongoing since November 2025, with no consensus reached [2][3]. - The potential strike at Mantoverde could lead to increased uncertainty regarding supply growth in 2026, further driving up copper prices amid an already tight supply situation [2][3]. Group 2: Impact of Labor Disputes on Copper Prices - Despite Mantoverde's estimated production of 29,000 to 32,000 tons in 2025 being a small contribution to overall supply, the ongoing labor disputes in the context of rising copper prices may increase the likelihood of similar strikes. Historical examples, such as the Escondida mine strikes in 2017 and 2024, illustrate how labor disputes can significantly impact production and subsequently drive copper prices higher [3][4]. - The current high copper prices may exacerbate labor disputes, making the supply chain more vulnerable and potentially leading to further price increases [3][4]. Group 3: Investment Outlook for Copper Sector - The fundamental driver for rising copper prices remains supply tightness, with uncertainties in supply growth due to potential disruptions like strikes. Meanwhile, demand for copper is expected to grow due to infrastructure upgrades in Europe and North America and the global shift towards clean energy [4]. - The company maintains a positive outlook on the mid-term investment value of the copper sector, anticipating continued upward movement in copper equities as market awareness of these dynamics increases [4]. Group 4: Investment Recommendations - For copper mining, the company recommends focusing on Zijin Mining, which has significant resource reserves and expected production growth. Other notable companies include Luoyang Molybdenum and Jinchuan Group [5]. - In the copper smelting sector, the company suggests monitoring Tongling Nonferrous Metals, one of the largest copper smelting enterprises in China, which is expected to enhance its copper concentrate self-sufficiency through the Mirador mine. Other companies of interest include Jiangxi Copper [5].