- Wood Mackenzie says mining firms are shifting capital from buybacks to copper projects to drive growth starting in 2025.
- Top copper producers may reinvest over 100% of cash flows, while shareholder distributions could fall to around 45%.
- Rio Tinto pushes an aggressive growth strategy, while BHP adopts a more cautious, copper-focused approach in Chile.
According to a new analysis from Wood Mackenzie, mining companies will start to focus on copper production as a core growth strategy in 2025.
Major firms are abandoning share buybacks and directing capital into growth projects. Copper leads the charge as companies seek to attract investment in a market with weak valuations.
Capital expenditure will rise across diversified and copper-focused miners. Companies are now prioritising high-return projects rather than distributing cash to shareholders.
In 2024, mining giants slashed share buybacks. Notional returns dropped below zero. Weak market response to distribution strategies prompted companies to rethink capital allocation.
“Buybacks no longer generate expected returns,” said James Whiteside, Head of Corporate Metals and Mining at Wood Mackenzie. “Growth investment, especially in copper, gains more market recognition.”
Copper’s long-term demand, driven by electrification and green energy, makes it a top choice for investment. Miners now view copper as essential for future value creation.
Many firms are targeting greenfield copper projects. But only a few have strong pipelines. For years, miners focused on shareholder value. Today, they are embracing growth.
Wood Mackenzie projects that top copper producers will reinvest more than 100% of their operating cash flows over the next three years, and diversified miners will reinvest over 50%. They plan to reduce shareholder distributions to about 45%.
Companies are reducing share buybacks and redefining capital discipline. Growth, not payouts, is the new priority.
“Growth-related risk offers better outcomes for some companies,” Whiteside said. “The right commodities deliver more value than generous dividends.”
The report also shows contrasting strategies from Rio Tinto and BHP. Rio Tinto is ramping up investment in significant projects. These include Simandou (iron ore), Oyu Tolgoi (copper), AP60 (aluminium), and new lithium assets. The company aims to hit a 60% reinvestment rate by 2025 and maintain it over time.
BHP is taking a more cautious route. It is concentrating on copper development in Chile and plans several investment decisions this year. Apart from the Jansen potash project, BHP has fewer growth opportunities. Its leverage may drop below that of its peers in the coming years.
Mining companies are entering a new era. They are shifting from shareholder rewards to long-term strategic growth, and copper is at the centre of this transformation.
By aligning with market signals and global demand trends, firms are repositioning for the next growth cycle. This pivot clearly focuses on investing in critical commodities and scale for the future.