BHP Group, Power Metallic Mines and KGHM Polska Miedź: A Revaluation Within Reach

BHP Group: Copper Is Becoming the Company's Main Source of Revenue

The mining conglomerate BHP has not only focused on the copper business but also operates in the iron ore sector. Until now, this commodity has dominated the company's revenue, but copper is increasingly taking center stage. The copper segment contributed USD 29 billion to revenue, whereas iron ore generated USD 23 billion. This development stems primarily from a sharp rise in copper prices, driven by higher global demand. Adjusted profit rose to USD 13.2 billion, while total revenue increased by 15% to USD 58.8 billion.

BHP's future strategy is heavily focused on expanding its internal copper production. As a result, this segment is expected to see annual production growth of 3 to 4% through 2035. At the same time, the company continues to produce iron ore very efficiently and maintains low production costs relative to the industry. Due to its very strong business performance, BHP is paying a dividend of USD 1.72 per share, which is the highest level in the past 4 years.

Financial experts are reacting positively to BHP's latest figures. Barclays has adjusted its price target slightly for the share from GBP 28 to 28.25 and continues to rate the stock as "Neutral." The reason cited is the group's solid financial foundation. At USD 6.7 billion, net debt was significantly lower than the company's target range. Looking ahead to the coming years, BHP has increased its capital expenditure plans for the period from 2029 to 2031 to an average of USD 11 billion annually. Analysts attribute this move to general cost increases driven by inflation, as well as the strategic expansion of ongoing mining projects.

Power Metallic Mines: Crucial Weeks

Excitement is building at Power Metallic Mines. The new mineral resource estimate for the combined "Lion" and "Nisk" deposits is scheduled for release at the end of August. The deadline, originally scheduled for July, was postponed solely due to capacity bottlenecks at the contracted engineering firm; the necessary company data is already available. This brings us closer to a milestone that could, for the first time, provide the high-grade polymetallic project with a more robust basis for valuation.

The drilling results to date are highly promising. In July, the Canadian company reported 36.42 m grading 2.83% copper equivalent (CuEq) in the Lion Zone, including a spectacular 6 m grading 12.38%. Previously, the company had identified, among other things, 13.30 m grading 3.98% and 5.26 m grading 8.45% CuEq. In addition to copper, the system contains nickel, platinum, palladium, gold, silver, and cobalt—an attractive mix of metals in times of growing demand for critical raw materials.

The location could also prove to be a competitive advantage in the long term. Nisk is located in Québec near a major highway and an airport, and directly across from a Hydro-Québec substation. This means that essential infrastructure is already available in the immediate vicinity.

The resource estimate is to be followed by a Preliminary Economic Assessment (PEA). Meanwhile, five drilling rigs continue to operate. New assay results from the summer program are expected starting in September, and modern geophysical surveys are also expected to identify new drilling targets.

Financially, Power Metallic had already secured breathing room in June with a capital increase of CAD 28.2 million. Commodities investor Eric Sprott and other well-known industry heavyweights participated in this capital increase. As a result, the company now has the capital needed for further exploration. And with the resource estimate, PEA, and new drilling results, it has several potential catalysts for share price growth. If the MRE confirms the high-grade hits identified so far, the stock's revaluation could enter a new phase.

KGHM Polska Miedź: Profit Growth and International Expansion

Another leading player in the industry, known for its diversified portfolio of scarce metals, is the Polish mining group KGHM Polska Miedź. Among other things, the company mines copper and silver. In this case as well, the quarterly results were very strong due to market conditions. Net income in the first half of the year rose to PLN 5.58 billion, representing a tenfold increase compared to the previous year. At the same time, revenue rose by just over 40% to nearly PLN 24.7 billion.

The main driver of the high revenues was the global rise in market prices, particularly for the core products copper and silver. On the operational side, however, there were regional differences. While production volumes in Poland increased due to improved capacity utilization, output at foreign locations declined. Reasons for this included the sale of business units and lower ore grades at the Robinson Mine in the United States. Despite the overall increase in profit, the company's share price fell slightly following the announcement, as earnings per share narrowly missed market expectations. A positive factor was KGHM's reduction in operating unit costs through various measures.

To operate with greater independence from price fluctuations in the commodities market in the future, the company is now pursuing a diversification strategy. Over the next 5 to 10 years, the primary focus will be on securing access to critical metals and tapping into new business areas. In doing so, the company is placing even greater emphasis on international markets.

The company is therefore currently evaluating targeted acquisitions. Projects in Canada, the US, Argentina, and Morocco appear particularly promising. In addition to direct raw material extraction, KGHM also plans to expand its own mining services division internationally to win additional external contracts. To this end, existing development projects in North and South America are proceeding according to schedule.

The copper boom is opening up opportunities along the entire value chain. BHP Group is already benefiting significantly from the rise in prices and is increasingly making copper the strategic center of the group. Power Metallic Mines, with its upcoming resource estimate for "Lion" and "Nisk" as well as new drilling results, is poised for decisive catalysts that could drive its share price and thus offers significant upside potential. KGHM Polska Miedź combines strong profits from copper and silver and aims to grow further through international expansion and acquisitions.