Copper Stocks ASX : Prospecting Profitable Investments in 2023

Team Veye | 07-Aug-2023 copper stocks asx

Copper is an excellent conductor of heat and electricity. It is also very malleable and ductile. There are significant use of the copper used in electrical generators and motors for electrical wiring and in electronic goods, such as radios and TVs. Global demand drives the price with emerging markets playing a pivotal role.  Specifically, China has experienced a large increase in copper consumption in the wake of urbanization and strong economic growth. The world's primary market for copper trading is the London Metal Exchange (LME), and CME Group (COMEX) futures. Australia holds a substantial portion of the world’s copper and was ranked 2nd behind Chile in 2016, according to the United States Geological Survey (USGS). 

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What are ASX Copper Stocks?

ASX copper stocks are particularly traded on the Australian stock exchanges. There are various listed ASX copper stocks ranging from small to medium and large by their respective market capitalizations. The Australian ASX stocks provide good opportunities for buying. There are a few names, as follows:

     Evolution Mining Limited (ASX: EVN)
     Sandfire Resources Limited (ASX: SFR)
     Zimplates Holdings Limited(ASX: ZIM)
     Chalice Mining Limited (ASX: CHN)
     Western Areas Limited(ASX: WSA)
     Syrah Resources Limited (ASX: SYR)
     Metals X Limited (ASX: MLX)

Investing in ASX Copper Shares

There are specific copper stocks listed on Australian exchanges that provide very good opportunities for short-term and long-term benefit. Chalice Mining Limited (ASX: CHN), with a market capitalization of $2.28 billion, provided a 22% (year to date as of 05/08/2023) return in a 1-year period. While Celsius Resources Limited (ASX: CLA), with a market capitalization of $40.33 million, has outperformed the index in a 1-year period delivering 50%(year to date as of 7/08/2023), On the flip side, there are copper stocks that have had a precipitous fall in the last year; one of them is 29 Metals Limited (ASX: 29M), with a market capitalization of $378.43 million, down by 49%(year to date as of 05/08/2023). Aguia Resources Limited (ASX: AGR) had a severe fall of 67% (year to date as of 05/08/2023) in a 1-year period. Investors need to take a call as per their individual risk appetite. Investing in ASX copper shares might be risky in the short to medium term.

Pros and Cons of Investing in Copper Shares

There is some significance in the need for copper in the relevant industry due to its key properties and applicability. The copper metal might play a vital role in the renewal move. Some analysts have predicted that the demand for copper may outpace the supply in the future. Therefore, the red metal has distinctive features that will cause its value to rise strongly. However, in the wake of a growing slowdown due to the rapid rise of interest rates and inflationary measures, the industry might hamper its growth, and demand for copper in the short run will remain sluggish. One should keep in mind that the portfolio might remain subdued because of temporary sluggishness in the demand scenario in the industry as a whole.

Top Copper Stocks on the ASX

Australia has numerous copper mines; the most prominent are the Mount Isa copper-lead-zinc deposit in (QLD) and the Olympic Dam copper-uranium-gold deposit in (SA) are having the largest copper-bearing deposits in the world. Although large copper deposits are mined by open-cut methods in many of the major producing countries, most of the copper ore produced in Australia comes from underground mines. There are specific methods of smelting are used to convert the concentrates to copper metal. One of them is to melt them with fluxes in a smelter furnace to produce copper matte, which is a mixture mainly of iron and copper sulfides usually containing 50 to 70% copper. There are Australian leading companies proactively involved in the exploration, extraction and, production of copper to meet the supply need in the market. Australian top copper stocks are as follows:

BHP Group Limited (ASX: BHP) with a market capitalization of $232.01B and current market price is $45.80 as of 5/08/2023; is producing commodities like iron ore, copper, nickel, potash, and metallurgical (steelmaking) coal. The company, through its operations in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, and South America, is providing copper needed for renewable energy; nickel for electric vehicles, and potash for sustainable farming, besides iron ore and metallurgical coal, which are the main ingredients required for steel, global infrastructure, and the energy transition.

BHP’s long-term success depends on factors like maintaining cost discipline, adapting to market dynamics, and managing social and environmental risks. It is likely to continue investing in technology and innovation to maintain its competitive position. BHP has strong fundamentals as global commodity demand is underpinned by population growth, rising living standards, and urbanization.

Chalice Mining Limited (ASX: CHN) with a market capitalization of $2.28B,and current market price $5.89 as of 5/08/2023;is having a flagship 100% owned Gonneville Nickel-Copper-Platinum Group Element (PGE) Project situated in WA on July 26 July 2023.The company's multi-track value creation strategy at the Gonneville Project is to advance development studies and progress regulatory approvals for a potential mine at Gonneville, which will continue with exploration in the surrounding region to determine the full scale of the mineral system, and attract strategic partners who would add technical, financial, and marketing capabilities. Chalice Mining Limited has invested $5.0 million YTD on pre-development activities and $26.3 million YTD on exploration activities at the Gonneville Project.

Evolution Mining Limited (ASX: EVN) with a market capitalization of $6.77 billion and a current market price of $3.69 as of 5/08/2023. The company reported copper production of 9,668 tonnes for the period ended 31, 2023. The company has provided guidance for the copper production of 48,000 tonnes, with an AISC of approximately $1,390 per ounce reflecting mainly a significant weather event at Ernest Henry.

The company generated $95.7 million of the whole entity’s cash flow in the quarter from consistent mine cash flow, the benefit of higher copper prices, and a tax refund associated with the 2022 tax return. The achieved copper price for the March quarter increased to $15,113 per tonne, and the year-to-date achieved copper price improved to $12,840 per tonne.

29METALS Ltd (ASX: 29M) with a market capitalization of $378.43 million and a current market price of $0.785 as of 5/08/2023.The company is extensively involved in the mining of copper-focused base and precious metals. The company develops and produces metals in the form of mineral concentrates that are sold to commodity trading firms or smelters for refining and on-sale as a refined metal product for end use. 

On 1 August 2023, the company reported the restart of operations at Capricorn Copper. Capricorn copper operations were temporarily suspended due to the impact of an extreme weather event. The phased recovery plan for Capricorn Copper was outlined in the Strategic Update. The company has been advised that the recovery of operations is progressing according to plan, with the recommencement of mining in Mammoth and Greenstone, and mineral processing operations.

 AIC Mines Limited (ASX: A1M) with a market capitalization of $175.74 million and current share price of $0.38 as of 7/08/2023; is proactively engaged in gold and copper exploration. The Company has two main projects, the Marymia gold and copper exploration project and the Lamil gold and copper exploration project, situated in the northwest of Western Australia.

The company produced 11,197 dmt of concentrate containing 2,890t of copper at an AISC of $5.63 per lb Cu and an AIC of $6.16 per lb Cu in the period ended June 30, 2023.

The company's sales of 2,654t of copper generated net revenue of $32.2 million and operating cash flow of $7 million. Net mine cash flow was negative $6.4 million after capital of $13.4 million was reported in the period ended 30 June 2023. AIC Mines Limited holds a major pipeline of copper, gold, and base metal exploration projects, capturing extensive land positions in well-endowed mineral sub-provinces across Australia.

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Frequently Asked Questions (FAQ)

What are the best copper stocks to buy Australia?

There are small-cap copper-producing companies as well as large-cap companies that offer a good investment opportunity in Australia. Some companies in the small cap category, such as Celsius Resources Limited (ASX: CLA) with a market capitalization of $40.33 million, Renegade Exploration Limited (ASX: RNX) with a market capitalization of $11.44 million, and in the large cap category, Chalice Mining Limited (ASX: CHN) with a market cap of $2.28 billion and BHP Group Limited (ASX: BHP) with a market capitalization of $232.01 billion, are better buy from a long term perspective.

What is the largest copper ASX Company?

Australia is well known for its copper reserves. BHP Group Limited (ASX: BHP), with a market capitalization of $232.01 billion and a current market price of $45.80, is one of the largest ASX copper companies in Australia.

What ASX companies mine copper?

ASX-listed companies are significantly taking advantage of the copper resources available in Australia. There are some names involved in the mining activities, such as Evolution Mining Limited (ASX: EVN); Sandfire Resources Limited (ASX: SFR); Zimplates Holdings Limited (ASX: ZIM); and Chalice Mining Limited (ASX: CHN).

How to invest in copper in Australia?

There are numerous direct or indirect paths to follow if an investor has been looking forward to allocating capital in copper, such as someone can invest in copper bullion bars and coins from metal exchanges, risky traders may impart trading in copper futures contracts, or a normal layman can invest in shares or ETFs.

Why not to invest in copper?

Commodity prices are highly deviated and cyclical by nature. Copper consumption is very high compared with the other base metals, although it depends on the economic growth prospects. Currently, industrial growth is leading at a slow pace, and demand for copper is also lagging behind. The majority of the copper stocks on the ASX have taken notable corrections in the last year and a half. The copper outlook in the short term seems very poor. An investor can wait for further corrections before taking a chance.

Is there a copper ETF on the ASX?

Global X ETFs Australia has launched the Global X Copper Miners ETF on the ASX with a ticker code of (WIRE) in 2022 in the wake of rising demand for copper and the commencement of revolutionary growth prospects such as EV’s Solar. 

 Is Australia rich in copper?

Australia is the major source of global copper and was secured second behind Chile in 2016, according to the United States Geological Survey. Australia has numerous copper mines of world significance, including the Mount Isa copper-lead-zinc deposit in Queensland and the Olympic Dam copper-uranium-gold deposit in South Australia, which is mining out one of the largest copper-bearing deposits in the world.

Who owns the largest copper mine in Australia?

Australia contains the largest mining resources in the world, with several large mines. Olympic Dam Mine the Olympic Dam Mine is an underground mine situated in South Australia. It is owned by BHP and produced an estimated 171.6 thousand tonnes of copper in 2020. The mine has been anticipated to operate until 2073, and the other one is the Mount Isa Copper Mine.


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