BHP chases more of the copper boom but big risks loom over huge project pipeline

Copper has overtaken iron ore as BHP’s biggest moneymaker but chasing more of the vaunted red metal could come with big headaches for the Big Australian.

An AI-fuelled data centre boom has driven copper prices up almost 50 per cent over the past year to record heights.

It has been a huge shot in the arm for BHP as the world’s most prolific miner of the highly-conductive metallic element.

BHP’s new boss Brandon Craig is eager to capitalise on the boom further by quickly working through a $US45 billion ($63b) pipeline of copper projects, mainly in South America and South Australia.

But developing new copper mines is a notoriously tricky, costly and time-consuming process relative to other commodities.

An S&P Global report found it takes on average about two decades to build a copper mine from the initial discovery of mineralisation, versus a decade or less for an average Pilbara iron ore mine.

This is why BHP tried multiple times to get its hands on Anglo American in recent years. Anglo’s multiple operational copper mines and late-stage projects were the prize.

And the challenges for BHP in the copper realm go beyond the significant risks associated with developing a suite of multi-billion-dollar developments from scratch.

Mr Henry’s predecessor, Mike Henry, raised the alarm numerous times that union activity on Pilbara iron ore mines was driving investment towards copper in South America.

But the company’s flagship copper mines in Chile are no industrial relations panacea.

A wage deal borne from union-led strikes in 2024 at the massive Escondida mine expires next year, setting the stage for another bitter battle.