BHP Mega Bid and $10,000 Copper Expose Mining’s Biggest Problem

Bloomberg04-29

(Bloomberg) -- Copper’s surge to $10,000 a ton just days after the bombshell news that BHP Group is trying to buy Anglo American Plc is highlighting a core disconnect at the heart of the industry: ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBHP Mega Bid and $10,000 Copper Expose Mining’s Biggest Problem\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-29 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/bhp-mega-bid-10-000-160016012.html><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>(Bloomberg) -- Copper’s surge to $10,000 a ton just days after the bombshell news that BHP Group is trying to buy Anglo American Plc is highlighting a core disconnect at the heart of the industry: ...</p>\n\n<a href=\"https://finance.yahoo.com/news/bhp-mega-bid-10-000-160016012.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4168","symbol_name":"多种金属与采矿","start_time":0,"source_url":"https://finance.yahoo.com/news/bhp-mega-bid-10-000-160016012.html","article_id":"2431064006","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/S7NqC6qImm9HEdg585iTzw--~B/aD02NzU7dz0xMjAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/bloomberg_markets_842/d7e4586bde93716db976b5c0a9e2824f"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2431064006","pubTimestamp":1714320016,"sourceInfo":{"source_id":"yahoofinance_au","name":"Yahoo Finance AU"},"weMediaInfo":null,"summary":" -- Copper’s surge to $10,000 a ton just days after the bombshell news that BHP Group is trying to buy Anglo American Plc is highlighting a core disconnect at the heart of the industry: miners just aren’t building enough mines.Musk Makes Surprise China Visit, a Week After Nixing India. Elliott Said to Have Built‘Large’ Stake in Buffett-Favored Sumitomo. BHP’s $39 Billion Copper Play Was Years in the Making. Fed Repricing Gives Rise to New Equities Playbook in Asia. Apple Intensifies Talks With OpenAI for iPhone Generative AI Features. The biggest producers all want to increase copper output to take advantage of rising demand in electric vehicles, grid infrastructure and data centers. BHP has made its $39 billion proposal to buy Anglo American in large part because the world’s biggest miner wants to grow in copper.The question of supply has been the driving force for copper’s 16% rally this year. Unlike the last time that prices hit $10,000, copper demand is relatively tepid for now and","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4168":"多种金属与采矿","BK7511":"ESG概念","BK7095":"多种金属与采矿","BK7507":"资源股","BHP":"必和必拓公司","BK4585":"ETF&股票定投概念","BHP.AU":"BHP GROUP LTD","BK4588":"碎股"},"translate_title":"必和必拓巨额竞标和1万美元铜暴露了矿业的最大问题","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BHP":1,"BHP.AU":1},"content_text":"(Bloomberg) -- Copper’s surge to $10,000 a ton just days after the bombshell news that BHP Group is trying to buy Anglo American Plc is highlighting a core disconnect at the heart of the industry: miners just aren’t building enough mines.\nMost Read from Bloomberg\n\nMusk Makes Surprise China Visit, a Week After Nixing India\nElliott Said to Have Built ‘Large’ Stake in Buffett-Favored Sumitomo\nBHP’s $39 Billion Copper Play Was Years in the Making\nFed Repricing Gives Rise to New Equities Playbook in Asia\nApple Intensifies Talks With OpenAI for iPhone Generative AI Features\n\nThe biggest producers all want to increase copper output to take advantage of rising demand in electric vehicles, grid infrastructure and data centers. BHP has made its $39 billion proposal to buy Anglo American in large part because the world’s biggest miner wants to grow in copper.\nRead: BHP’s $39 Billion Bid for Anglo American Was Years in the Making\nYet, that bullishness still isn’t translating into the huge investments involved in developing new pits and shafts and associated infrastructure. A successful takeover would make BHP the biggest copper producer with about 10% of the market, but it won’t make any difference toward meeting the world’s supply needs.\nProduction from existing mines is set to fall sharply in the coming years, and miners would need to spend more than $150 billion between 2025 and 2032 in order to fulfill the industry’s supply needs, according to CRU Group.\n“Copper looks like the last remaining supply risk for the EV industry,” said Bernard Dahdah, senior commodities analyst at Natixis SA. “In a net-zero scenario, we’re going to need a vast amount of copper, and we’re going to need a different strategy to boost supply.”\nThe question of supply has been the driving force for copper’s 16% rally this year. Unlike the last time that prices hit $10,000, copper demand is relatively tepid for now and the physical market is well supplied.\nRead: The Copper Market Grapples With a Crucial Question\nInstead, the surge is being fueled by investors betting on looming shortages and the expectation that mining executives and their shareholders aren’t ready to finance and build enough new projects — and would rather buy out their rivals instead.\nThe reasons behind the underinvestment aren’t new, but they’re all getting worse: high-quality deposits are getting harder to find, and so is funding for small explorers; social and environmental resistance to mining is growing, and the cost of labor, equipment and raw materials has surged. And the handful of miners that have kept building have had a torrid time of late.\nSpeaking at the copper industry’s annual Cesco Week gathering earlier this month — and one day after BHP had privately made its pitch to Anglo — BHP’s head of copper and potash strategy Laura Whitton gave an assessment of the ways in which copper mining had become more difficult and more expensive.\nThe world was more reliant on older mines with lower ore grades than in the past, she said. “On supply, there’s a true challenge.”\nWhile the copper market is relatively well supplied for now, investment bank analysts and a growing crowd of hedge fund investors are increasingly bullish on the outlook, believing it has the potential to rally to unprecedented levels over the next few years as the market faces growing shortages. \nOne key challenge is that new mines take years and often decades to build, and so decisions need to be calculated based on whether copper prices far in the future will justify the investment.\nMiners would need $12,000 copper to justify spending on new mines, according to Olivia Markham, who co-manages the BlackRock World Mining Fund. And even then their investors may be reluctant to fund them.\n“At a geological level, we have the projects — what we need is the money,” said Dahdah. “The last time copper prices were at $10,000, miners didn’t increase spending, they increased dividends.”\nThe lessons of the past decade would suggest that if the money does flow, it could come from China, but there are headwinds there too. Chinese-owned miners were responsible for about 40% of the net increases in supply over the past decade, but that looks set to fall to 16% over the next five years, according to McKinsey and Co. \nMassive Chinese investment in overseas mining assets has already upended the markets for key battery metals such as nickel, lithium and cobalt, pushing them all into surpluses. Copper is also a key component in EV batteries and motors, but the global market is so large that China won’t be able to solve the industry’s supply challenge on its own. \n“There is a clear and compelling need for additional mine capacity to be brought online,” said William Tankard, principal analyst for base metals at CRU. “The gauntlet is being laid down at the feet of the miners, and it’s going to be exceptionally challenging to deliver.”\n--With assistance from Jack Farchy.\nMost Read from Bloomberg Businessweek\n\nCaught Between the US and China, a Powerful AI Upstart Chooses Sides\nUS White-Collar Job Growth Stalls, Even in Pandemic Boomtowns\nHow North Korea’s Man in the West Ran Afoul of US Authorities\nBiden Strategy to Tame Gas Prices Is in Peril as Iran Sanctions Pressure Mounts\nHow a Massive Hack of Psychotherapy Records Revealed a Nation’s Secrets\n\n©2024 Bloomberg L.P.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2431064006"}