BHP to Boost Copper CapEx Amid Soaring Demand

Global copper demand is surging, driven by the rapid shift to renewable energy and the rise of electric vehicles. Mining heavyweight BHP Group (ASX: BHP) is well-placed to benefit, with copper accounting for 33% of its revenue in 2024. Visible Alpha consensus estimates show analysts project BHP to produce 1.9 million tonnes of copper in fiscal 2025, generating $21.4 billion in revenue — a +15.5% increase from the previous year. Much of this production is expected to stem from Escondida in Chile, the world’s largest copper mine. The mine is forecast to produce 1.2 million tonnes in 2025, representing 64% of BHP’s total copper production. BHP’s South Australian operations are also set to contribute significantly. The Olympic Dam, Carrapateena, and Prominent Hill mines are projected to produce 211,000, 71,000, and 45,000 tonnes of copper in 2025 respectively. Additional production is anticipated from the Pampa Norte mine in Chile (253,000 tonnes) and the Antamina mine in Peru (133,000 tonnes).

Following three unsuccessful bids for Anglo American (LSE: AAL) earlier this year, BHP is turning its attention to bolstering production at its existing operations. Analysts expect BHP’s copper growth capital expenditure (CapEx), which is the CapEx a company invests to expand its existing operations, to rise +24% year-on-year to $1.3 billion in 2025. Copper growth CapEx in BHP’s South Australian assets — including Olympic Dam, Prominent Hill, and Carrapateena mines — are projected to grow +22.8% to $492 million. Meanwhile, Escondida’s growth CapEx is forecast to increase by +18.8% to $615 million. In contrast, sustaining copper CapEx, the expenditure needed to maintain current production capacity, is forecast to dip -3% year-on-year to $2.7 billion.