A definitive trend is emerging in the global mining sector, as highlighted in a recent report from BofA Securities: major mining corporations are collectively pivoting towards copper assets. Following the 2025 earnings season, BofA's analyst team observed that nearly all primary mining companies, from BHP and Rio Tinto to Glencore, are prioritizing copper as a strategic focus. Capital expenditures are rising significantly and have now recovered to more than 50% of their previous peak levels. BofA retains a strongly bullish outlook on copper prices, forecasting they will reach $15,000 per tonne. The institution believes the sector is currently in the seventh month of an earnings upgrade cycle. After three years of downgrades, not only copper and gold but also coal, nickel, and zinc are now seeing upward revisions. Investors should note the allocation opportunities in this sector, with fund manager surveys indicating it has shifted to an overweight position.
**Strategic Shift to Copper: An Industry Consensus Forms**
Analysis of the 2025 financial results by BofA's research team revealed that all major miners are seeking greater growth opportunities in copper. BHP has become a prime example—the profit contribution from its copper business now surpasses that from iron ore, making it the group's largest earnings source. BHP claims it has the highest EBITDA sensitivity to a $1 per pound increase in copper prices among large diversified miners. Despite being the world's largest copper producer, the company still plans to boost its copper production to over 2 million tonnes per year by the mid-2030s through a combination of brownfield and greenfield projects.
Rio Tinto is also actively transforming its portfolio. While iron ore remains an important product, the absolute EBITDA growth from its copper and aluminum businesses has entirely offset the decline from iron ore. Glencore's growth options in copper are even more pronounced, demonstrating the strongest copper growth potential in the industry through its mix of brownfield and greenfield projects. The company is seeking partners for its projects, particularly for the large El Pachón greenfield project in Argentina.
**Substantial Increase in Capital Expenditure: Growth Stories Regain Favor**
Data from BofA shows that capital expenditure from major miners has now recovered to over 50% of its prior peak and continues to climb. This indicates that companies have once again received a mandate for growth, and investors are eager to hear growth narratives. However, project execution has been "mixed," with instances such as cost overruns at the Jansen project and technical issues at the QBII project. Notably, Glencore's search for partners for its projects reflects a prudent approach to mitigating risk associated with single ventures. At the project level, BHP is advancing the Vicuña joint venture with Lundin Mining. The first phase is expected to cost $7-8 billion and deliver approximately 300,000 tonnes per year of copper-equivalent production. South32 possesses near-term growth options of around 20%, primarily from the Hermosa polymetallic project in the US and the Sierra Gorda copper joint venture in Chile.
**Commodities: Copper Prices Hold Firm, Gold and Silver Retreat**
BofA maintains its bullish stance on copper, predicting prices will reach $15,000 per tonne. BofA notes that inventory accumulation is occurring in the United States but not in other regions. Strategic stockpiling could imply an increase in apparent demand. In iron ore, prices continue to trend downward, with BofA identifying approximately $90 per tonne as a cost support level. The market is monitoring the dispute between BHP and China Minerals Resource Group (CMRG) over pricing for Jimblebar ore. Gold and silver have retreated significantly from recent peaks, but for related companies, these levels still imply substantial embedded free cash flow. BofA's commodity research team holds a bullish view on several cyclical commodities, forecasting a copper price of $11,750 per tonne for 2026 and $13,688 per tonne for 2027.
**Early Signals of a Cyclical Turn**
BofA points out that classic signals of a "late-cycle beginning" are appearing: resource currencies are strengthening—first the South African rand, Chilean peso, and Brazilian real, and now the Australian and Canadian dollars. Oil prices have also rebounded from lows, and cost pressures have begun to emerge, although they are not yet severe. These signals remind investors to monitor cost inflation risks, even though they do not currently pose a major threat. The BofA research team emphasizes that after three years of earnings downgrades, the industry has now entered a seven-month earnings upgrade cycle. This cycle encompasses not just copper and gold but also commodities like coal, nickel, and zinc. The core logic for stock performance in the sector lies in the combination of improved positioning and the ongoing earnings upgrade cycle.
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