BHP Group Plans Major Investments in Chilean Copper Mines Amid Expected Deficit
As part of the ongoing decarbonization efforts, a substantial increase in copper demand is anticipated due to the need for additional cabling, which plays a crucial role in energy transition infrastructure. This growing demand for copper is one of the reasons why BHP Group, a global raw materials giant, is projecting a copper deficit of 10 million tons over the next decade. In response, the Australian company plans to make significant investments in the world’s largest copper mine, Escondida, and other projects in Chile.
BHP management recently announced its target investment volume of between $10.7 billion and $14.7 billion over approximately the next ten years. This investment will not only support the expansion of the Escondida mine but also focus on the smaller Spence mine and the reactivation of the Cerro Colorado mine. These efforts are seen as necessary since Escondida's annual production could peak as early as next year, given declining ore grades. Without expansion, production is expected to drop by about 300,000 tons to 1.6 million tons by the end of the decade.
BHP, the world’s largest publicly listed mining company, plans to take bold steps to counteract this anticipated decline in production. The investment aims to support increased demand for copper, which is essential for producing cables, electric vehicle batteries, and constructing data centers. Brandon Craig, President of BHP Americas, emphasized that the deficit could reach 10 million tons by 2035.
According to BHP, the first of these projects are expected to start production between 2027 and 2028, with the latest set to come online between 2031 and 2032. BHP has recently attempted to expand its copper portfolio through acquisitions, including a nearly $50 billion bid for Anglo American, but the attempt was unsuccessful. Addressing whether BHP would focus on organic growth or further acquisitions, CEO Craig stated, “Our default position is to take that resource and develop it. We always have a range of investable growth options.”
