The BHP Group Ltd (ASX: BHP) share price is under the spotlight on news that it’s searching for copper in Europe.
BHP is one of the world’s biggest resource businesses. Iron ore generates the most earnings, but copper is already an important part of its commodity portfolio as well.
Copper expansion plans
BHP has made a deal to search for copper in Serbia as it tries to increase its exposure to the metal which could be one of the most important commodities for the world’s decarbonisation efforts, according to reporting by the Australian Financial Review.
Copper is used in things like wind turbines, electricity grids and electric vehicles. The AFR said that the top miners are “bullish on the outlook” for copper, as demand is expected to be even stronger than supply, so there is a growing thought that there could be shortages.
BHP recently announced that it was going to acquire copper miner OZ Minerals Limited (ASX: OZL) for an enterprise value of A$9.6 billion. This will create strong synergies for the copper projects that are in close proximity.
According to the AFR, BHP has agreed to pay fees and exploration costs for three copper exploration targets in Serbia with Canadian Mundoro Capital. It will allow BHP to take full control of any or all of the assets, if enough copper is found to make a viable mining project. If a good project is found, it could be useful for the BHP share price.
Mundoro reportedly has three copper exploration targets in the Timok region of Serbia.
The AFR also reported that BHP said building its copper and nickel businesses are priorities as it builds its portfolio away from fossil fuels and “ultimately iron ore”.
Final thoughts on the BHP share price
I think it’s a good move to expand its copper efforts and hopefully achieve more copper production.
While I like the moves, I think the BHP share price has run a bit too far for me to call it good value. It’s up 30% in six months, so I’d want to wait until it’s back down to that level of around $40 again, whenever that is.
