The Irish Picks: Hottest Copper Stocks for 2024

"Rising Copper Demand in Energy Transition Poses Challenges and Opportunities for Ireland"

Avoiding a climate crisis presents significant challenges, especially in transitioning power and transportation systems to renewable and clean energy. This transition will vastly increase copper demand, surpassing current production levels, and giving major stocks a big lift. Copper’s exceptional conductivity makes it crucial for the energy transition. Copper is found in most appliances like toasters, air conditioners, microchips, cars, and homes. 

Interesting fact: The average car contains 65 pounds of copper, while a typical home has over 400 pounds. Constructing advanced grids for decentralized renewable sources and stabilizing their supply requires extensive copper wiring. Solar and wind farms, which cover large areas, demand more copper per power unit than centralized coal and gas plants. Electric vehicles (EVs) use over twice as much copper as gasoline cars. 

Meeting net zero carbon emission targets by 2035 may require doubling annual copper demand to 50 million metric tons. Even conservative estimates foresee a one-third demand increase over the next decade. What more is the recent surge in copper prices starting early this year as you can see below. In May 2024, it reached almost $5 per pound in LME. So, there could be no wiser move than investing in copper to ride along this rising demand. We believe so, too, that’s why we have considered some of the best copper stocks in 2024.

Here are the top three copper stocks that would be worthy to add to your investment portfolio this 2024. The World’s Largest Copper Reserve Holder: Southern Copper Market Cap: US$85.24 billion For investors seeking substantial exposure to copper, Southern Copper Corporation’s reliance on this metal can be appealing. The prominent Mexican mining company primarily focuses on copper production, boasting the largest reserves of the metal globally. 

However, its operations extend beyond copper, producing valuable by-products such as silver, zinc, and molybdenum. This diversification, while significant, doesn’t overshadow its primary reliance on copper, which accounted for about 79% of the company’s net sales over the 3 years ending December 31, 2022. Southern Copper’s stock has experienced notable volatility over the past few years. After a stellar performance in 2020, where the share price surged over 50%, the company saw a decline of more than 7% over the subsequent 2 years. 

However, 2023 marked a recovery, with the share price climbing nearly 25% in the first nine months. And it further skyrocketed in the beginning of 2024 and reached the first-time high in May. The recent uptick in copper prices has not only bolstered the company’s market performance but also enabled it to increase dividend payments significantly. At its current share price, the stock offers an attractive dividend yield of 5.4%, making it appealing to income-focused investors.

Strategic Investments and Project Development Holding the largest copper reserves globally, Southern Copper is also operating top-tier assets in investment-grade countries like Mexico and Peru. The company’s commitment to expanding its portfolio and reserves is evident through its significant capital investment program, exceeding $15 billion, planned for this decade. It aims to enhance and expand its operations across several high-potential projects, including: Buenavista Zinc, Pilares, El Pilar, and El Arco Projects in Mexico: These projects are crucial for the company’s growth strategy. El Arco, in particular, benefits from significant infrastructure investments aimed at enhancing its competitiveness. Tia Maria, Los Chancas, and Michiquillay Projects in Peru: These projects further diversify the company’s portfolio and strengthen its position in the global copper market. From Southern Copper website Southern Copper’s operations in Mexico and Peru provide a strategic advantage due to the stability and investment-grade ratings of these countries. This geographical diversification into regions with favorable mining regulations and robust infrastructure supports the company’s long-term growth and sustainability.

BHP Group: Casting A Wide Net in Copper Market Cap: US$142.99 billion BHP Group is a world-leading resources company engaged in the extraction and processing of minerals, oil, and gas. As a major player in the global copper market, the Australian miner is committed to innovative practices and sustainability, aiming to supply essential resources efficiently and responsibly. BHP owns and operates several copper mines in Chile and the Olympic Dam in South Australia. Copper is BHP’s second-largest revenue generator after iron ore. This mineral segment plowed over US$16 billion into the company’s income in 2023, with 1,716.5 kilotons of copper production. The world’s largest mining company seeks to cast a wide net in copper with its exploration project in the high Arctic known as Camelot Project.

BHP launched this program early this year, covering the Queen Elizabeth Islands in the Northwest Territories and Nunavut. The project aims to assess the potential for copper across six locations, spanning thousands of square kilometers. Exploration sites include Ellesmere Island, approximately 800 kilometers from the North Pole, Melville Island, Ellef Ringnes Island, and Axel Heiberg Island. In response to the surge in copper prices, mining companies are scrambling to increase supply including BHP. The Australian mining giant recently announced a strategic partnership with Ivanhoe Electric to explore copper and other essential minerals. Their collaboration aims to identify new sources of these critical resources, driven by the global shift towards clean energy and the electrification of various industries. The exploration agreement with Ivanhoe Electric is structured in two stages. The first phase focuses on project generation, involving exploratory activities by both companies. If successful, the subsequent phase could lead to the formation of joint ventures to develop and operate mining projects. More recently, BHP has made a bold move to expand its copper exposure by making a $39 billion bid for Anglo American. However, the offer was put off the table, delaying the company’s aim to cement its dominance in the copper market. Still, the Australian miner continues to explore significant copper projects and find ways to deepen its involvement in the sector.

Coppernico Metal: Pioneering Copper-Gold Exploration in South America Coppernico Metals Inc. is an exploration company dedicated to generating value for its shareholders and stakeholders through meticulous project evaluation and exploration excellence. The company aims to discover world-class copper-gold and nickel deposits in South America, focusing on sustainable practices and community engagement. Coppernico’s flagship project, the Berta Project in Chile, shows promising potential for copper and gold resources. Through strategic partnerships and innovative exploration techniques, Coppernico is positioning itself as a key player in the South American mining industry. The company’s commitment to responsible mining practices and environmental stewardship sets it apart in the competitive mining sector. With a strong focus on sustainability and long-term value creation, Coppernico Metals Inc. is poised for success in the evolving copper market.

In conclusion, the demand for copper is set to rise significantly in the coming years due to the global shift towards clean energy and electrification. Investing in copper stocks, such as Southern Copper and BHP Group, can provide investors with exposure to this growing market. With the increasing importance of copper in renewable energy technologies and electric vehicles, companies that specialize in copper production and exploration are well-positioned for future growth. As the world strives to reduce carbon emissions and achieve sustainability goals, copper will continue to play a vital role in powering the transition to a greener future.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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