Keeping a Close Eye on Copper: A Look at BHP, Power Metallic Mines and Freeport-McMoRan

BHP: The Shift to Copper Is Paying Off

The price of copper recently hit a new all-time high. Low supply, disruptions caused by earthquakes and landslides, and declining ore grades in copper mines are driving up the price. This year, copper is the top performer among all metals, with a gain of nearly 14%. And demand remains high.

Fundamentally, the electrification of society—with more and more batteries in vehicles, phones, and laptops—is driving rising demand. On top of that, many power grids in industrialized countries need upgrading. Furthermore, the AI boom is providing an additional boost. In an AI data center, copper is needed wherever high currents flow, or extremely fast data transfers over short distances are required. In addition to the power supply, this includes transformers, busbars, and, of course, massive power cables for distributing high currents to the server racks. Copper is also essential for cooling and thermal management, as it conducts heat extremely well.

For the mining giant, this environment is a godsend. By focusing on copper, along with iron ore and potash, the company has backed the right horse in Melbourne. Analysts predict a copper boom that will last for years. BHP will present its financial results for fiscal year 2026 at the end of August. However, production data is already available. For iron ore, the company set a new volume record at 265 million metric tons (+1%). In copper, output was 3% lower than the previous year at 1.953 million metric tons due to declining ore grades at the giant Escondida mine in Chile. Finally, gains were reported for coking coal (+3%) and thermal coal (+9%).

In the copper sector, BHP could become active in the acquisition market, as both of its existing mines are old and exhibit lower ore grades. In general, however, the company is considered one of the major producers and should be able to offset the lower volumes with higher selling prices. BHP's stock has been on an upward trend for more than a year and has nearly doubled in value during this period. Interested investors should take advantage of corrections to enter the market.

Power Metallic Mines: The Market Awaits the New Resource Estimate

The turnaround in the commodities market is also making itself felt at Power Metallic Mines. Following the correction in the spring, the stock has now risen by more than 20% within just a few weeks. The market is eagerly awaiting the first mineral resource estimate (MRE) for NISK, a polymetallic project in the north of the resource-rich province of Québec. In addition to copper, the deposit also contains nickel, cobalt, palladium, and platinum. Given the current situation with critical raw materials, this is a major advantage for NISK.

Exploration is making significant strides. More than 100,000 drill meters are scheduled to be completed this year. The most recently reported drill results clearly demonstrate the project's potential. For example, drill hole 26-116 returned grades of 2.83% copper equivalent (CuEq) over an impressive length of 36.42 m.

The resource estimate is expected to be released at the end of August. It is the first of its kind for this project. The MRE is intended to serve as the basis for preparing the first preliminary economic assessment (PEA) for NISK. The PEA—known in full as a Preliminary Economic Assessment or also as a Scoping Study—is the first economic and technical evaluation of an early-stage mining project. It serves to analyze the fundamental economic viability of a deposit and provides investors with initial data on potential production, mining operation duration and production costs. The key factor here is profitability, which is indicated by the IRR (Internal Rate of Return).

Analysts already see significant upside potential for the shares of Power Metallic Mines. The research firm GBC has set a price target of CAD 3. This implies the stock has the potential to more than double in value.

Freeport-McMoRan: The Copper King

Freeport-McMoRan is one of the world's largest copper producers and, as such, benefits significantly from fluctuations in the copper price. The US-based company operates a portfolio of diversified, high-grade copper mines worldwide. Its flagship is the Grasberg gold-copper mine in Indonesia, one of the largest of its kind in the world.

In the second quarter, the Phoenix-based company demonstrated just how much the copper price dominates its balance sheet. While revenue fell by 7.3% to USD 7.03 billion due to lower production at Grasberg, the figure still exceeded market consensus. Furthermore, profit metrics nevertheless improved, as copper is much more expensive than it was a year ago. Earnings per share came in at USD 0.68, a 28.3% increase compared to the same quarter last year.

When it comes to dividends, Freeport-McMoRan has pursued a strict strategy for years. The policy is to always distribute at least half of free cash flow to shareholders. For the last quarter, a total dividend of USD 0.15 per share was approved. In addition, the company has an active share buyback program with a volume of up to USD 3 billion.

Freeport shares are approaching the USD 70 mark for the fourth time this year. From a technical analysis perspective, a breakout would be equivalent to a decisive breakthrough.

BHP is a mining giant benefiting increasingly from the copper price. However, its two largest mines are old and suffering from declining ore grades. Power Metallic Mines is an attractive developer. The next catalyst is likely to be the resource estimate for the main NISK project, expected in late August. Freeport-McMoRan is benefiting from rising copper prices and has a broadly diversified portfolio of mines.