BHP Group Ltd (ASX: BHP) shares are in focus after announcing this week it’s investing $840 million in copper production.
It’s a huge miner, with significant iron ore and copper operations.
BHP invests in boosting copper production
The miner announced that it’s investing A$840 million in a number of growth initiatives at its Olympic Dam project, which is a key element of its global copper production.
It aims to strengthen its foundations of underground mining productivity and continue building its copper province in the far north of South Australia.
There are four key areas that BHP is investing in.
First, an underground access tunnel (known as a decline) into the southern mine area, providing access to a new section of the resource.
Second, a new backfill system to deliver paste fill via underground pipes to new areas of the mine.
Third, an expansion of ore pass capacity, streamlining ore handling and reducing haulage distances, with new trains and an extended underground electric rail network.
Fourth, an installation of a new oxygen plant to improve smelter performance and support increased copper processing capability.
Management comments
The BHP chief operating officer (COO) Edgar Basto said:
BHP is the largest producer of copper in the world, and we expect to grow our copper base from 1.7 million tonnes to around 2.5 million tonnes per annum. Achieving that scale requires significant copper growth, and we are fortunate to have a world-class copper province right here in South Australia to do just that.
The South Australian copper province is already performing strongly, consistently delivering more than 300,000 tonnes a year for the past three years. We are progressing a series of strategic projects that will strengthen our base business and help lay the foundations for future growth.
BHP Asset President of Copper SA, Anna Wiley, said:
Copper SA is a globally significant province, and BHP’s continued investment is a clear signal of our long-term commitment to its development. These investments strengthen the foundations for future growth – creating jobs, boosting local business opportunities, and driving greater operational efficiency across our sites.
Final thoughts on the BHP share price
I think it’s a good thing that BHP is increasing its copper production because I think that will be the key commodity for future earnings.
However, I wouldn’t choose to invest today, partly because of the Chinese contract uncertainty. Additionally, the business is cyclical and this doesn’t seem like a cheap price to buy at. I prefer looking at ASX mining shares when there are market worries.
