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Mining industry

BHP Weighs Resurrecting Defunct Mines as US Copper Industry Sees Shift in Government Policy

Strategic Insights

— 1 min read

A significant shift in government policy has prompted BHP, the world's largest mining group, to reassess its options in the US copper industry. The company's chief executive, Mike Henry, has stated that initiatives introduced under President Donald Trump have led to increased exploration in the US, and a review of BHP's options in Arizona, the heart of the US copper industry. This development comes as the US copper industry is undergoing a transformation, driven by the government's push to secure resources and better compete with China.

Key Takeaways:

  • BHP is considering resurrecting defunct mines in Arizona's Globe-Miami region, where the company has four closed mines from decades ago. This move is prompted by higher copper prices, new US policies such as tariffs and faster mining permitting, and the reprocessing of tailings waste from the sites.
  • The giant Resolution Copper project in Arizona, a joint venture with Rio Tinto, is on the agenda for BHP. However, the project awaits the outcome of several court cases before it can be developed.
  • BHP is undergoing a strategic shift to produce more copper, with demand for the metal set to soar. The company derives most of its earnings from iron ore but aims to increase copper production to meet growing demand.
  • Mike Henry, BHP's chief executive, has acknowledged that the company's approach to trade is evolving, following the US's shift towards protectionism. He believes that governments and the public have signaled that trade will not be as free in the future, making domestic mining more attractive.
  • The tariffs imposed by the US have made domestic mining more economically viable, according to Henry. However, he also emphasized the need for certainty in the mining sector, highlighting the importance of legislative tariffs rather than those approved through executive order.

Statistics:

  • BHP's current market capitalization is $140bn.
  • Demand for copper is set to soar, driven by the increasing use of the metal in wiring.
  • The Resolution Copper project, a joint venture between BHP and Rio Tinto, is awaiting the outcome of several court cases before it can be developed.

Sources:

  • "BHP considers resurrecting defunct mines in US copper belt" - Financial Times.
  • "BHP chief executive Mike Henry: 'We have to live with reality'" - Financial Times.

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