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BHP, the world’s largest mining company by market capitalisation, has boosted copper production as it races to meet demand for the metal used in key technology ranging from electric vehicles to power grids.
The Australian miner produced 10 per cent more copper in the six months to December 31, compared with the previous year, largely driven by strong performance at its Escondida operations in northern Chile, where production rose 22 per cent to a decade high, the company said on Tuesday.
Growth in Chile help offset a downturn at BHP’s South Australia copper mines, where electrical storms and power outages hit operations.
The world’s largest miners have been rushing to increase their exposure to high-growth copper assets as increased demand is expected to create a shortage.
Copper is a crucial ingredient in energy transition, used in the production of EVs, solar farms and power grids. It is also used in data centres supporting artificial intelligence services. BHP has forecast demand for the metal to increase 70 per cent by 2050 compared with 2021.
The race for copper has also driven consolidation in the global mining sector. BHP tried to increase its copper holdings last year through an aborted £39bn takeover attempt on Anglo American.
It has since acquired Canadian-listed copper company Filo, which operates in South America in a joint deal with Lundin Mining, and said it expects to spend at least $10bn to expand its Escondida operations over the next seven years.
Meanwhile, Rio Tinto and Glencore, which both own substantial copper assets, also held early-stage talks last year, though the discussions did not progress to a deal.
BHP’s copper growth during its fiscal first half contrasted with its iron ore production, which was up just 1 per cent. The traditional lifeblood of Australia’s mining industry has had a volatile year as demand from the Chinese property market has cooled. Steelmaking coal shipments were up 14 per cent.
“We are well positioned to continue strong momentum into the second half with a number of assets now expected to deliver production in the upper half of their respective ranges, while maintaining tight cost control,” Mike Henry, BHP chief executive, said. “BHP is in good shape and we have a clear pathway for growth.”
Shares in BHP rose 0.4 per cent on Tuesday.
Kaan Peker, an analyst with RBC Capital Markets, said copper production growth was the “standout” for BHP, but the overall picture was “mixed” as a strong operational performance was offset by weaker than expected pricing and higher debt.
