Commodities
Home›Commodities›Mining›BHP CEO says copper build strategy beats acquisitions…
BHP CEO says copper build strategy beats acquisitions amid high valuations
Craig said BHP can execute its copper growth pipeline at $16,000 to $30,000 per tonne versus roughly $85,000 per tonne for pure-play copper targets, before any takeover premium.
BHP CEO Brandon Craig said the miner is prioritizing new copper expansion over acquisitions, arguing that current market valuations make building projects far cheaper than buying rivals.
Speaking in Melbourne as he delivered his first full-year results, Craig brushed aside speculation that BHP could pursue uranium developer NexGen Energy, noting that “copper is really the focus” for investment while BHP continues to study other opportunities and remains comfortable with its core commodity pillars: copper, iron ore, steelmaking coal and potash.
Craig said BHP can deliver its copper growth pipeline with capital intensity of $16,000 to $30,000 per tonne, compared with an implied $85,000 per tonne for listed pure-play copper companies. He added that including a potential takeover premium would push the figure above $100,000 per tonne, which he characterized as roughly a five-to-one gap between building and buying.
BHP also indicated the strategy can be funded internally, with the company expecting, at consensus commodity prices, $35 billion in attributable cash flow over the next five years after investment and capital spending, according to Mining.com.
Latest closeCopper $6.606 ▲0.2%