Gold producers see opportunity in consolidation of Australia's copper sector

More consolidation is expected for Australia's copper sector as gold miners raking in profits from surging prices are drawn by the red metal's increasing attractiveness.

Copper is "a key enabler of the global energy and digital transitions," and US imports have been accelerating ahead of expected tariff impacts, Lawrie Conway, CEO and managing director of major gold producer Evolution Mining Ltd., told the Diggers and Dealers Mining Forum in Kalgoorlie, Australia, on Aug. 4.

"It's certainly a good fit for us if we were having more copper in the portfolio," Conway said.

Bob Fulker, managing director and CEO of Hillgrove Resources Ltd., told the media on the sidelines that "whether it comes from the gold sector or from overseas, I believe there will be copper consolidation in Australia."

"All the major players like Rio Tinto Group and BHP Group Ltd. can actually see the looming deficit in that supply-demand curve; and in the Australian market, there has been that draw from overseas of the Australian copper producers," Fulker said.

Australia's copper production is currently dominated by BHP, which aims to double its copper production in South Australia to over 650,000 mt/year by the mid-2030s with its acquisition of OZ Minerals Ltd. in 2023.

Since then, overseas companies have taken over Australian copper players, including US gold producer Harmony Gold Mining Co. Ltd., which announced in May it would buy Australian producer MAC Copper Ltd. for $1.03 billion.

MACH Metals Australia Pty. Ltd., a unit of Indonesian conglomerate Salim Group, closed its acquisition of ASX-listed Rex Minerals Ltd. in October 2024. London's Central Asia Metals PLC increased its cash offer for New World Resources Ltd. on July 17, only for Canada's Kinterra Capital GP Corp. II to come up with a better deal to nail down an unconditional offer.

"We have definitely seen those that don't have copper want copper, and those that already have copper want even more," James Palmer, CEO of copper producer 29Metals Ltd., told Platts, part of S&P Global Commodity Insights, on the forum sidelines Aug. 4.

The London Metal Exchange Copper Grade A cash price was $9,581.25/mt on Aug. 1, increasing from $8,923.85/mt a year prior.

Fighting for copper mines

Competition for copper is increasing as the lack of exploration beyond shallow geological cover in recent decades makes quality deposits even harder to find. This is why 29Metals boosted its exploration spend from A$4 million in 2024 to A$14 million in 2025, Palmer said.

"Everyone wants copper, but it's always got to be economic -- something that's meaningful as far as tonnage goes, with the potential to have low enough risk and costs. That's what... we have with Gossan Valley at Golden Grove [in Western Australia], which we are focusing on first," Palmer said.

29Metals is also working on the water issues that caused the suspension of operations in March 2024 at Capricorn Copper in Queensland. In the case of both mines, "we are much better off focusing on the copper that we have already got, rather than fighting with everyone else to look for new copper deposits," Palmer said.

Conway warned that the average time from copper discovery to production is currently 18 years, while mined grades and the rate of major new discoveries are both in decline.

"There's got to be 61 new mines brought into production over the next five to six years to meet the demand for copper. Therefore... that copper price will go up, and will go up materially, over the next five to 10 years," Conway told the media.

For Evolution, finding mines similar to its own Australian copper-gold operations -- Ernest Henry in Queensland and Northparkes in New South Wales -- "would be worthwhile additions," but "at the moment it would be fairly competitive in the copper space if there was an asset like that [available]," Conway said.

Evolution, a top-20 gold producer globally in 2024 according to S&P Global Market Intelligence data, currently derives 25% of its revenue from copper and has scope to lift that to 40%, Conway said.

A high copper exposure will provide the buffer to maintain margins when the current surge in gold prices inevitably falls away, Conway said.

"As an industry, we have been poor allocators of capital through these periods when you get record margins," the executive said of the gold sector.