BHP is ramping up its global search for copper to meet surging demand fueled by the energy transition. However, the scarcity of high-quality deposits, particularly in stable jurisdictions, poses a significant challenge for the mining giant, according to recent reports.
Over the past five years, BHP has undergone a strategic shift in its investment priorities. In 2020, iron ore was the dominant contributor to its earnings and capital allocation. Today, its share has dropped to less than a quarter, while copper now commands half of the company’s total capital expenditure.
BHP’s cautious approach stands as a roadblock as it favours stability over high-risk, high-reward ventures. Competitors such as Glencore and Rio Tinto have embraced volatile regions—Kazakhstan, the Democratic Republic of Congo, Mongolia, and Guinea. However, BHP has traditionally stuck to safer ground: Australia, Brazil, Canada, Chile, Peru, and the United States. Even its unsuccessful $49 billion bid for Anglo-American last year was deliberately structured to exclude assets in South Africa.
Rio Tinto’s 28-year battle with its Simandou iron ore project in Guinea led to executive shake-ups and expensive bribery settlements, according to Bloomberg Opinion columnist David Fickling. Similarly, Glencore has dealt with legal troubles, paying over $1 billion in fines for bribery and market manipulation.
BHP has completed a $2 billion deal for a 50% stake in Argentina’s Filo del Sol copper project, partnering with Lundin Mining. The investment marks a strategic move into a country historically avoided by major miners due to its volatile political and legal landscape.
However, Argentina has become increasingly attractive under libertarian President Javier Milei, whose pro-mining policies have signaled a shift in the industry’s favor. Despite these reforms, the country’s history of policy instability makes BHP’s investment a calculated risk.
Glencore and Rio Tinto reportedly discussed a potential blockbuster deal, with large-scale mergers and acquisitions reshaping the mining industry, BHP should pursue a long-rumored target: Freeport-McMoRan, the world’s top copper producer for future developments. This deal is expected to immediately double BHP’s copper output and secure control over four of the five largest copper mines.
“The world’s greatest mineral deposits last for generations, but opportunities to acquire them are rare. For BHP, that moment may have arrived. Henry would do well to strike while the copper is hot,” Fickling concluded.