Spotlight on Australia - February 2025

As its revenue from iron ore, LNG, and coal slowly falls, Australia can rely on growing revenue from gold and copper. The price of copper has nearly tripled since March 2020 (see chart below) and in its latest earnings report, mining giant BHP earned more from copper than iron ore. Australia’s copper production is worth around AUD 13 billion, but as demand for data centres, electric batteries, and renewable energy increases, copper extraction and revenue will skyrocket.

The rise of copper

The price of copper has long been a barometer of global economic activity. This is because copper is an essential input for the construction, manufacturing, and electronic industries. As the global economy has risen and fallen so has the price of copper.

The copper price also highlights key changes in the global economy, such as the rise of China in the 2000s and the rise of renewable energy in the 2020s.

However, the rise of renewable energy, EVs, and data centres has pushed copper into a super-cycle. The rise of India and increased defense spending will only strengthen this trend. Copper now has its own unique narrative. Wood Mackenzie expects copper demand to increase by 24% by 2035.

More than lithium or cobalt, copper is the essential ingredient for renewable energy and future electricity infrastructure (see the red bars in the chart below).

Source: RBA

However, the supply side is also critical with analysts forecasting shortfalls well into the next decade. The world is not producing enough copper.

“Copper has become the strategic bottleneck of the global energy transition,” Charles Cooper, Wood Mackenzie, research director, head of copper research.

Australia’s copper potential

Australia is already the world’s 7th largest producer of copper (2024). But, it holds the world’s third-largest copper reserves; slightly behind Peru. Of the major producing countries, it is the only one underperforming relative to its reserves. Australia has potential to burn (see chart below)!

Copper was first discovered in Australia in 1842 near the Barossa Valley by a shepherd looking for lost sheep. By the 1860s, South Australia had some of the largest copper mines in the world and was being called the “Copper Kingdom”. 

Australia’s oldest continually operated copper mine is Mount Lyell in Tasmania. Over AUD 4 billion worth of copper has been extracted from the mine since it first opened in 1883. It was initially a gold mine but some canny investors quickly realised its copper potential.

Today, Australia’s largest copper mine is the copper-uranium Olympic Dam mine in South Australia owned by BHP. It holds 69% of Australia’s copper reserves and produces around 300k tonnes of copper annually. In 2025, BHP announced a AUD 840 million expansion for the mine. 

Next in size is the copper-gold Cadia mine in New South Wales owned by Newmonr. Glencore’s Mount Isa mine in Queensland was the third largest but was exhausted in 2025.

Australia produced 765 kilo-tonnes of copper in 2024-25 with AUD 13 billion in earnings. Production is expected to increase by 24% in 2026-27.

Australia has two copper smelters, in Olympic Dam and Mount Isa. In recent years, Glencore has reached out for government support so that its smelter can compete against subsidised Chinese and Indonesian smelters. The closure of Glencore’s Mount Isa copper mine has also affected the smelter although it also smelts copper from elsewhere in Australia. 

The chart below shows Australia’s largest copper mines and deposits.

Source: Geoscience Australia

Saying goodbye to the iron age

BHP and Rio Tinto are the world’s two largest mining companies, both based in Australia.

Most investors would characterise them as iron-ore miners, but both companies have foreseen the rise of copper and other “future-facing metals” and have been strategically shifting their business focus, especially BHP. In its latest half-yearly results, 51% of BHP’s revenue came from copper.

BHP began mining copper in Escondida Chile in 1990 and in Antamina Peru in 2001 but it was its purchase of Oz Minerals in 2023 for AUD 9.6 billion, which elevated its copper portfolio. This was followed by 2025’s acquisition of Filo Corp. with Lundin Mining to develop copper mines in the Vicuña district of Argentina and Chile.

In contrast, Rio has been slower to the copper party. It has world-class copper assets in Mongolia and Chile, but its second look at acquiring Glencore was driven by Glencore’s world-class copper mines. Glencore’s 10 mines would have tripled Rio’s copper output over the next decade and would have given it access to lower points on the cost curve (see chart below). Rio will now have to look at organic growth options. 85% of Rio’s exploration budget is now focused on copper.

“And we have the project pipeline to extend growth well into the 2030s, with copper at its

Core.” Simon Trott, Rio Tinto, CEO, 2025 full-year results.

Besides BHP and Rio, Australia has other copper miners pushing ahead with production both within Australia and abroad. Newmont has its Cadia mine in NSW. Capstone Copper has a market cap of over AUD 12 billion and has mines in Arizona, Mexico, and Chile. Sandfire has mines in Spain and Botswana.

A technological leader

Australian mining companies are also pioneering new techniques in extracting copper.

Rio’s Nuton joint-venture uses bio-leaching to extract copper more cleanly and efficiently from sulphide ore. Micro-organisms eat the ore and concentrate the copper. It even removes the need for a concentrator, tailings, and a smelter.

Queensland startup Banksia minerals uses electrochemical technology to extract copper from low-grade ore. They recently received a AUD 5 million grant from the Australian Renewable Energy Agency.

Final thoughts

In the past the price of copper has been volatile, tied closely to global economic growth and sensitive to supply disruptions at key mines. But now we have entered a copper super-cycle. Demand from renewable energy, EVs, and data centres will see demand outstrip supply well into the mid 2030s. Australia will ride this super-cycle on the backs of BHP, Rio, and countless smaller local copper miners. The lucky country strikes again and investors can benefit by investing or lending money to related companies.