BHP Group to Spend at Least $7 Billion on Copper Extraction at Escondida Mine

BHP Group is expected to invest at least $7 billion in copper extraction from the Escondida mine in Chile in the coming years, according to analysts quoted by Reuters. Representatives of BHP may announce these plans next week during a roadshow for the Escondida and Spence deposits.

Copper is a critical element in BHP's long-term strategy, particularly as a key metal for the global energy transition. However, BHP's annual copper production is forecasted to decline by around 300,000 tonnes, reaching 1.6 million tonnes by the end of the decade, as reported by Reuters.

To address this production challenge, BHP officials plan to demonstrate new, more efficient copper extraction methods at the Escondida mine, which explains the necessity for increased project costs. The total investment for these enhanced extraction methods is projected to be between $7 billion and $12 billion over several years. Building a new processing plant is expected to require between $5 billion and $6.5 billion of this budget.

In the current financial year, BHP estimates capital expenditure, including exploration, to be around $10 billion. This could increase to $11 billion in the medium term. However, it remains unclear how much of the spending on Escondida is accounted for in the current capital expenditure forecast, Reuters notes.