Australian mining giant BHP has ramped up its output of copper, one of the most sought-after metals in the clean energy shift, amid falling demand and prices in its iron ore division that has driven the bulk of its profits for years.
Melbourne-based BHP, the world’s biggest mining company, still earns most of its money from its sprawling operations in Western Australia, where it digs up vast amounts of iron ore and ships it to China to be processed into steel.
Stacked cathodes at BHP Billiton’s giant Escondida copper mine in northern Chile.Credit: AP
But chief executive Mike Henry has been leading a push to boost BHP’s exposure to what he terms “future-facing” commodities, particularly copper. As a critical ingredient in electric wiring, copper is considered among the most in-demand materials needed in the build-out of renewable energy generation and transmission infrastructure, while electric cars require up to four times more copper than internal combustion engine vehicles.
In an update on Tuesday, BHP revealed it had boosted copper production by 17 per cent in the three months to December 31 compared to the same time a year earlier. The figures were stronger than most analysts had been expecting.
“Copper production was the standout,” said Kaan Peker, an analyst at RBC Capital Markets.
Last year, BHP made repeated attempts to take over London-listed rival Anglo American, which it had targeted largely for its extensive ownership of copper mines. After its $US49 billion ($78 billion) offer was rebuffed, BHP walked away from the proposal and embarked on plans to expand its South American copper presence under a deal with Canada’s Lundin Mining to acquire a 50 per cent stake in junior copper miner Filo Corp.
Henry on Tuesday said Filo’s projects were among the “most significant copper discoveries in decades”.
Across the December quarter, BHP’s group-wide copper output of 510,700 tonnes beat consensus market forecasts by 5 per cent, largely due to BHP’s jointly owned Escondida mine in Chile achieving its highest production level in a decade.
While BHP’s copper assets in South Australia were hit by a weather-related power outage at its Olympic Dam operations, the impact was “more than offset” by Escondida, Henry said.
