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General Market Commentary
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General Market Commentary
BHP to step up copper exploration, expansions to meet electric vehicles sector’s rising demand
World number one mining company BHP (ASX, NYSE: BHP) (LON:BLT) plans to step up copper exploration and expansions as it wants to be ready to meet electric vehicles sector’s rising demand for copper.
"We want more copper resources in our portfolio. And we believe the most valuable pathway to achieving this is through exploration, the drill bit," Danny Malchuk, president of operations at BHP's Minerals Americas, said at Bloomberg’s LME Week forum on Wednesday.
Unlike most miners, which slashed exploration budgets during the downturn that ended last year, BHP has kept its copper exploration budget steady at an average of $60 million annually over the last four-to-five years out of its overall budget for exploration of around $1 billion, Reuters reports.
Copper is a key component of the lithium-ion batteries used in the electric vehicles, as well as power inverters and in the charging infrastructure needed to keep them running.
“The expectation is that the next generation of electric vehicles, which will have even more automation, will require even more copper,” the company said in September, when it declared it expected 2017 to be the “tipping point” for electric vehicles.
Copper is a key component of the lithium-ion batteries used in the electric vehicles, as well as power inverters and in the charging infrastructure needed to keep them running.
BHP, already the world's second-biggest listed copper miner, has been taken steps towards increasing it presence in the market as of late. In July, the company said it would spend $2.5 billion to extend the life of its Spence mine in northern Chile by more than 50 years.
That announcement followed the mining giant’s decision last year of raising its annual exploration spending by 29%, allocating nearly all its $900 million budget to finding new copper deposits, to add to a strong portfolio that includes assets such as Escondida in Chile, the world’s biggest copper mine, and Olympic Dam in Australia.