Zinger Key Points
- BHP Group warns of a copper shortage as AI and data centers grow.
- Global copper demand could rise by 72% by 2050, says BHP.
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Mining company BHP Group Ltd BHP has flagged an acute shortage of copper metal as global Big Techs, including Microsoft Corp MSFT, Google parent Alphabet Inc GOOG GOOGL, Amazon.Com Inc AMZN, and more, splurge on their artificial intelligence ambitions.
The growth of data centers and AI could boost global copper demand by 3.4 million tonnes a year by 2050, the Financial Times cites BHP’s CFO Vandita Pant.
Pant told the FT that BHP Group expects global copper demand to reach 52.5 million tonnes annually by 2050, up 72% from 2021. Previously, the mining company had warned against a possible rise in copper prices as the demand outweighed supply.
Also Read: BHP Averts Strike At World’s Largest Copper Mine, Stabilizes Chinese Copper Supply
Copper is indispensable for industries pivotal to the zero-emission target, including power cables, electric vehicles, and solar farms. Therefore, a crisis in the metal could hamper the prospects of companies ranging from Microsoft, Google, and Amazon to EV companies like Tesla Inc TSLA and more lest Nvidia Corp NVDA, fails to supply AI chips to the Big Techs due to the copper crisis.
JPMorgan analyst Patrick Jones projected a four million metric tonnes copper deficit by 2030, courtesy of EVs and renewable energy demand. The analyst also blamed China’s weak demand, which accounts for over 50% of global copper demand.
BHP Group’s copper production rose 9% in fiscal 2024 for the second successive year, reaching 1.9 million tons. The average realized copper prices increased in fiscal 2024.
BHP Group has snapped a 50% stake in Argentina’s Filo del Sol and Josemaria copper projects, which have the potential to help accomplish a 70% increase in global copper demand by 2050.
BHP Group expects the production to grow by another 4% in fiscal 2025, reaching 1.85 million tons–2.05 million tons.
BHP Group’s stock has been down close to 14% in the last 12 months. Investors can gain exposure to the stock through the Avantis International Equity ETF AVDTHE and Dimensional International Core Equity Market ETF DFAI.
Price Action: BHP stock is up 0.42% at $53.11 premarket at the last check on Monday.
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