BHP Shares Upgraded to Buy, As Site Visit Boosts Copper Conviction

Strike risk increases at BHP's Escondida copper mine, with a 95% strike vote. Mediation is ongoing, with a potential 5-day extension. Disruption could impact BHP, Rio Tinto, and JECO, affecting copper supply. According to the article, Escondida's strike vote introduces near-term copper supply risk.

BHP and Rio Tinto led mining companies as top contributors to Australia's $87.5B corporate tax haul, despite lower commodity prices. Retailers, including Coles and Woolworths, paid $22.1B in 2024-25, per the ATO's report.

Berenberg raised its target for BHP to 35p, maintaining a hold rating. The firm expects BHP to increase capital spending on copper projects, including a potential decision on the Vicuña project in Argentina. BHP's nickel business may be sold by early 2027, and talks with NexGen Energy are deemed unlikely. BHP's focus may shift to project execution and cash flow.

The Australian S&P/ASX 200 Index rose 0.87% to 8,784.70, driven by gains in gold miners, energy stocks, and some tech companies, despite negative cues from Wall Street. Key movers include Rio Tinto, BHP Group, Woodside Energy, Block, and Northern Star Resources. Lindian Resources fell 23% and DhroneShield surged 10% on company news.

Fortescue, an Australian iron ore company, is building a 690MW solar farm to power its mines, aiming for 'Real Zero' emissions by 2030. The company's Pilbara Green Grid includes solar, wind, batteries, and electric trucks. BHP and Rio Tinto are also investing in renewable energy for their operations, with BHP focusing on copper mines in Chile and Rio Tinto on aluminum smelters in Australia.

BHP plans to invest over $10 billion in Western Australia iron ore operations by 2028, aiming for 305 million tons annual output and upgrading infrastructure. The strategy focuses on high-grade ores and reducing emissions, following recent projects like a $2 billion power network agreement and a $900 million project.