BHP wants to add more copper resources to its global portfolio to capitalise on an expectation that there will be an upsurge in demand in the coming years.
The major miner is buoyant about the future of copper due to the emergence of two drivers that have the potential to significantly lift demand for the base metal – electric vehicles and renewable energy.
BHP’s Americas operations president Daniel Malchuk, speaking at the LME Week Bloomberg Forum in London this week, said a renewable energy like solar power required 5kg of copper per kilowatt – more than double the copper intensity of alternative forms of generation.
He added that a hybrid car used 40kg of copper, twice the amount of a regular petrol car.
BHP already has extensive copper resources around the world, including at the Olympic Dam mine in South Australia and at Escondida in Chile.
However, the company hopes to build on this portfolio by increasing its exploration for copper in the coming years.
Malchuk explained that exploration has the highest potential to deliver future returns for BHP.
“That is why it is a key part of our copper strategy… but we also recognise that given our high standards it is not an easy task,” Malchuk said.
“Copper exploration these days is as a trade-off between depth and maturity.
“The mature, well established and explored regions such as Chile are clearly less likely to host a big discovery close to the surface, with new deposits more likely to be at depth… and therefore more difficult to identify.”
However, Malchuk believes as BHP ventures into less mature regions where exploration activity has been lower, such as Ecuador, the potential for new discoveries closer to the surface is greater.
“This is not about having the largest budget. It is about allocating the funds wisely through a highly focused and technical approach,” he said.
“We have both the advantages of geoscience expertise and industry diversification. So what does this mean?
“Our copper exploration team is leveraging our in-house petroleum exploration expertise with a specialised approach to exploration and deposit modelling.”
Malchuk said BHP had also developed partnerships, including the Universities of Wollongong and Western Australia, to help tackle the geoscience issues faced by explorers.