BHP and Anglo American shares are higher on Friday as markets lean into copper’s role in the AI infrastructure build-out, but Rio Tinto is essentially flat, showing the “strategic metals” trade is narrower than it looks at first glance.
BHP (LSE:BHP) shares are trading at 3,146p, up 1.13% from Thursday’s close of 3,111p, having ranged between 3,131p and 3,170p intraday. Anglo American (LSE:AAL) is up 0.61% at 3,764p, against a previous close of 3,741p, in a session range of 3,760p to 3,805p. Rio Tinto (LSE:RIO) is broadly unchanged at 7,075p, down slightly from 7,081p, having traded between 7,075p and 7,179p. All three moves come after the FTSE 100 closed at 10,572.73 on Tuesday, up 0.84%, helped by UK GDP data and easing Iran tensions, according to BBN Times.
Copper is the credible part of the story
The clearest structural driver behind today’s move is copper’s exposure to AI-linked electricity demand. Bank of America data cited by Yahoo Finance shows electricity demand is set to grow faster than the global economy as data centres expand, a trend that requires copper for grid buildout and wiring. Rio Tinto and Mongolia have set up copper talks, according to a report from Bez Kabli, even as iron ore weakness has weighed on the stock this week. Separately, Rio Tinto has begun trialling battery-electric haul trucks alongside BHP and Caterpillar in Western Australia’s Pilbara region, according to AD HOC NEWS, a sign the sector is investing for the long term rather than just riding a price spike.
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What doesn’t hold up is the idea that a broad rally in precious metals is behind today’s move. Silver’s price is down 49% since its January peak, according to CBS News, and spot gold slipped below $4,000 an ounce this week, with silver at $57.73 an ounce, as the US dollar strengthened and rate hike expectations built, according to MSN. That undercuts a simple “record metals” framing, even as copper demand looks more durable.
On fundamentals, the three stocks tell different stories. BHP trades on a price-to-earnings ratio of roughly 20.5 with a return on equity near 25% and a dividend yield of 4.3%. Rio Tinto is the cheaper of the two majors on a P/E of around 15.2, with a dividend yield near 5.7%. Anglo American’s trailing earnings are negative, with a net margin around minus 20%, and its dividend payout ratio exceeds 100% of profit, meaning the payout currently isn’t covered by earnings.
The next test for the sector is whether copper demand from AI infrastructure translates into pricing power strong enough to offset the drag from a wobbly precious metals market and, in Rio Tinto’s case, ongoing iron ore softness. Markets appear to be rewarding copper exposure selectively rather than buying miners as a single strategic block.