If you’ve been reading my work for a while, you’ll know copper is my core investment focus.
I’ve given this metal plenty of airtime over the last two and a half years since I started with Fat Tail in 2022.
While it’s not the contrarian play it once was, I believe plenty of heat remains in this market.
To understand why, let’s revisit the big events that shaped the copper market in 2024 and why they could set the stage for more activity in 2025.
Significantly, 2024 was a year when major mining firms finally ‘walked the talk’ on their bullish copper stance.
Pouring billions into new developments and acquisitions.
Majors moving on copper
It all started when BHP made one of the largest buyout attempts in years, with its £39 billion bid on Anglo-American.
That’s around $77 billion in Aussie dollar terms.
So, how did this diversified miner align with BHP’s copper ambitions?
Well, according to the world’s largest miner, the deal was about acquiring Anglo’s prized South American copper mines.
But despite returning to the negotiating table THREE times this year, BHP still couldn’t get a deal over the line!
This signals that the investment cycle has turned in the seller’s favour.
And a key reason BHP changed tact immediately after Anglo rejected its final offer.
Just two months later, BHP made an offer on Filo Corp—a company with a large copper-gold project in the high-altitude region of the Andes.
Now, this deal was important for a couple of key reasons…
This was a large, underdeveloped deposit.
The project will require billions in capex investment, with no immediate payback.
That’s another clue that the mining investment cycle is ticking toward a more bullish phase…where acquisitions are taking on a different form.
As the majors get priced out of producing assets, they’ll continue to turn to underdeveloped projects.
And that’s where I see the best opportunities in 2025.
So, how should you consider playing that trend?
Copper ETFs or focus on specific stocks?
Everything I’ve been detailing over the last two and a half years has aligned to this precise moment…
A focus on copper juniors.
Accumulating high-quality projects likely to attract the attention of a major has been a core strategy for my paid readership group.
It’s a theme that’s taken time to develop, but we’re now starting to reap the benefits. I’ll get to some examples in just a moment.
However, before I do, you must understand there’s still ample time to capitalise on this opportunity.
But only if you can think globally.
You see, Australia is a minnow in the copper market, and opportunities here are limited.
You could navigate that with the Copper Miners ETF [ASX:WIRE], an easy way to gain international exposure to a host of global copper projects.
But here’s a better idea…
Consider investing directly in this emerging copper frontier
For decades, miners have focussed on Chile for exploration and development.
It’s the Saudia Arabia of copper!
Yet, cross the border, and you’ll find an identical GEOLOGICAL SYSTEM but comparatively little exploration.
The place I’m talking about is Argentina.
Over the last two years, I’ve focused heavily on explorers and developers unlocking the country’s vast untapped potential.
That strategy has already delivered strong results.
Filo Corp…the company I mentioned earlier is now under an offer from BHP and Lundin Mining.
Plus, we hold two other Argentinian copper plays (that I won’t name here) that have surged with triple-digit gains in 2024.
That’s at a time when most Aussie copper juniors have sunk to all-time new lows!
That’s why abandoning your home bias can be critically important as a resource investor.
Go where the best rocks are for a particular commodity. That’s where you could secure the greatest opportunities.
Of course, you must keep in mind that these stocks carry high risk and can be volatile, so you need to do your research and go in with your eyes wide open, but…
Keep your focus on quality, and double down on these projects as they build success through drilling.
The time to move is now!
If 2024 showed you anything, the world’s largest miners are shifting focus…
They’re finally ready to invest billions in new copper developments.
And as a small-time investor, who are we to argue with that strategy?
These miners sit at the coalface of supply and demand.
They’re the ones investing billions and pegging their careers on these decisions.
Activity kicked up in a big way in 2024, and I believe it could shift another gear in 2025.
So if you want to be part of that action, I suggest focussing on Argentina, where the biggest discoveries are being made.
You can find the names of the stocks I’m recommending to my paid readership group here.
And with that, I’m hanging up my boots for 2024.
I hope you have a safe and enjoyable break with family and friends over the coming weeks.
Get some rest, re-set your mind and prepare for an exciting year ahead.
Until then, see you again on the other side as we explore more opportunities in 2025!
Regards,
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James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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