US tariffs on copper have pushed the metal to record highs in recent months, with the world’s biggest miners following in tandem.
Anglo American, BHP and Glencore have added R444bn to their combined market cap over the past 90 days, with all three mining behemoths reversing their year-to-date losses.
Aside from gold and platinum group metal (PGM) producers, which have enjoyed a price rally since January, most JSE-listed mining companies came under pressure in the first three months of the year, as geopolitical tension and trade restrictions threatened the outlook for base metals.
Copper, however, has become the industry’s saving grace, with the metal’s price rallying since April amid tightening trade restrictions.
Over this period, Anglo has added more than 20% to its share price. The group’s recent gains come after it embarked on a radical restructuring to focus its portfolio entirely on copper, premium iron ore and crop nutrients last year.
Shares in Glencore, a leading copper supplier, have also added over 23%, while BHP has gained nearly 10% as copper takes centre stage in the Australian firm’s growth strategy.
BHP has been consistently bullish on copper over the past year, with CEO Mike Henry last year outlining plans to double the group’s copper production in Australia while continuing to invest in South American assets.
The Australian miner staged three attempts to take over Anglo’s coveted copper assets in Chile and Peru last year, with the proposed transaction valued at $49.8bn.
On Wednesday, US President Donald Trump announced plans to impose a 50% tariff on copper imports, sending the metal to a fresh record high.
Trump’s proposed tariff aims to protect domestic copper supply in the US by bolstering local production and easing the country’s reliance on South American imports. The US imports nearly half of its copper, a key input in electronics, electric cars, data centres and renewables.
The higher duties on copper may attract more shipments into the US over the next month, potentially tightening global supplies and boosting the price further.
Copper has long been in the crosshairs of geopolitical and trade tensions, with Trump threatening a 25% tariff on copper imports back in March.
Tariffs aside, the world’s biggest mining companies have been scrambling to secure copper assets ahead of a potentially huge market shortfall.
Demand for copper is expected to surge more than 40% by 2040 and the metal’s dwindling supply placed it among the biggest drivers of SA mining’s mergers & acquisitions last year, according to a report by consulting firm PwC.
Business Day reported that in the 12 months to end-June, SA mining recorded 32 deals worth almost $10bn (R180bn), a leap from $1.5bn in 2023 and $2.5bn in 2022.
The recent copper rally is also a boon for SA gold miners, many of whom have used their healthier balance sheets to invest in copper mines.
In 2022, Harmony Gold acquired the Eva Copper project in Australia for R4.1bn, while progressing its Wafi-Golpu operation in Papua New Guinea.
In April, AngloGold Ashanti signed an agreement with Australia’s Kincora Copper that will see the miner invest $25m-$50m in copper exploration over the next seven years.
Amid record gold and copper prices and rising PGM prices, the local mining industry has been one of the few sectors largely unscathed by Trump’s tariffs.
Mining continues to be SA’s best performing sector this year, with the JSE precious metals and mining index up more than 75% since end-December.
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