The 10 Biggest Copper Stocks

Copper is one of the world's most versatile metals and the third most used behind iron ore and aluminum. It's an essential component in buildings and cars, part of the money supply, and a key material used in renewable energy. Because of that, it's in high demand. The global economy consumed 23.6 million tons of it in 2018, and that figure is expected to grow to 29.8 million tons by 2027, according to a forecast by Fitch Solutions.

Given that outlook, the world's biggest copper miners should be able to continue expanding their production in the coming years. That growth potential is why investors should get to know the copper industry. Here's a closer look at the 10 biggest copper stocks.

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The 10 largest publicly traded copper producers

The world's largest copper company by production and reserves is Codelco, which is owned by the government of Chile. However, investors who are interested in the copper sector have plenty of other options. The following table contains the 10 largest publicly traded mining companies that produce copper, ranked by their market capitalization.

Data source: Ycharts. Market capitalization data as of Sept. 1, 2019.

BHP Group

BHP Group is a diversified global resources company. It operates mines in Australia, Canada, the U.S., Chile, Peru, and Brazil focused on copper, iron ore, coal, nickel, zinc, and potash. The company also produces oil and gas from offshore locations near the U.S., Australia, and Trinidad and Tobago.

In 2018, BHP Group produced 1,753 kilotons of copper (about 3.9 billion pounds). Its biggest asset is the wholly owned Olympic Dam mine in Australia. It contains one of the world's largest deposits of copper, gold, and uranium as well as a significant quantity of silver. The rest of the company's copper production comes from its stakes in several South American mines. The largest is Escondida in Chile, which is one of the world's leading producers of copper.

While BHP is a top copper producer, its biggest moneymaker is iron ore. In 2018, that metal contributed 39% of the group's underlying EBITDA, followed by copper at 28%, coal at 19%, and oil and gas at 14%.

Copper, however, remains a big part of BHP's future. In 2017, the company approved the Spence Growth Option, which will increase the production and extend the life of its Spence mine in Chile when the project comes on line in 2021. Meanwhile, BHP has some even larger-scale copper expansion projects in development. These include a major one to increase production at Olympic Dam as well as the Resolution copper project in the U.S. to develop one of the world's largest untapped copper deposits. Because of that pipeline, BHP Group will likely remain a leader in the copper sector for years to come.

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Rio Tinto

Rio Tinto is a diversified global mining company. It owns interests in mines that produce aluminum, copper, diamonds, gold, iron ore, uranium, and several industrial minerals. The company operates in 35 countries across six continents, though its largest operations are in Australia and North America.

In 2018, Rio Tinto produced 634 kilotons of copper. The company owns stakes in mines that produce the metal in the U.S., Chile, and Mongolia. The crown jewel of Rio Tinto's copper business is Oyu Tolgoi in Mongolia, which is one of the largest known copper and gold deposits in the world.

While Rio Tinto is a major copper producer, like BHP Group, it makes most of its money on iron ore. That metal contributed 62% of its underlying EBITDA in 2018, followed by aluminum at 17%, copper and diamonds at 15%, and energy and minerals at 12%.

The company, however, does have lots of upside to the growing copper market. It's still developing Oyu Tolgoi as well as the Kennecott mine in the U.S., which provides it with visible production growth through 2023. In addition, it's BHP's partner on Resolution Copper. Because of that portfolio of expansion opportunities, Rio Tinto appears poised to remain a major copper producer in the coming years.

Vale

Vale is a Brazil-focused mining company that also operates in Canada, Oman, China, and Mozambique. It's the world's largest iron ore and nickel producer. It also mines manganese ore, ferroalloys, coal, copper, the platinum metals group, gold, silver, and cobalt.

In 2018, Vale produced 395 kilotons of copper from mines in Brazil and Canada. In Brazil, the company operates the Sossego and Salobo mines where it benefits from using the infrastructure it built to transport iron ore. Salobo is one of the largest copper deposits ever discovered in Brazil. In the meantime, it also produces copper in Canada as part of its nickel operations in that country.

While Vale is a major copper producer, like many of its large peers, it also makes most of its money on iron ore. In 2018, that metal accounted for about 74% of its total revenue, followed by nickel at 13%, and copper at 6%.

Because of its focus on iron ore and nickel, Vale's copper output has been in a steady state of decline. It has fallen from 453 kilotons in 2016 to 395 kilotons in 2018, driven by the steady depletion of its existing mines and the sale of its stake in Zambia's Lubambe mine in 2017. Vale, however, did approve the Salobo 3 mine in 2018. This $1 billion expansion project will boost the mine's annual copper production capacity from 200 to 250 kilotons when it comes on line in 2021. Because of investments like that, Vale will continue to be a major supplier to the copper market.

Glencore

Glencore is a globally diversified natural resource company. It started as a commodities trading company. However, it has evolved over the years to become both a major producer and marketer of metals and materials. The company operates mines that produce copper, cobalt, zinc, nickel, and ferroalloys as well as marketing aluminum and iron ore produced by third parties. It's also a large coal producer as well as a leading marketer of oil, refined products, and natural gas.

Glencore is one of the largest producers and marketers of copper in the world, making it a dominant force in the sector. In 2018, it produced 1,453 kilotons of copper at its mines in Africa, Australia, and South America. It also sources and recycles copper scrap in North America and Asia. In addition to that, the company marketed about 4,500 kilotons of copper in 2018 through its marketing business, which buys it from other miners and supplies it to customers in the automotive, electronics, and construction sectors.

Coal was the company's biggest moneymaker in 2018 at 33% of its group EBITDA. Copper was next at 30% of its earnings followed by zinc at 15% and nickel at 5%.

Glencore expects its copper production to grow at a 3% annual pace through 2021 to around 1,500 kilotons. Driving that anticipated increase is its investment in Katanga Mining Limited, which operates a large-scale copper-cobalt mine in the Democratic Republic of Congo. The company also has projects to expand its Mopani mine in Zambia and Collahuasi mine in Chile. Add those expansion-related investments to the company's marketing expertise, and Glencore is well positioned to continue being a significant player in the copper sector.

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Barrick Gold

Barrick Gold is one of the largest gold mining companies in the world, with operations and projects in 15 countries. In addition to gold, the company produces copper.

Barrick Gold's copper operations consist of a wholly owned copper mine in Zambia and 50% interests in copper mines in Chile and Saudi Arabia. Those three mines combined to produce 383 million pounds of copper in 2018, led by the Lumwana mine in Zambia at 224 million pounds.

Gold, however, is by far Barrick's biggest moneymaker. In 2018, that precious metal supplied 91% of the company's revenue while copper was a distant second at 7%.

Barrick Gold's primary focus is on building the world's most valuable gold mining company. It aims to do that by increasing output at its lowest-cost mines and selling off its noncore ones. However, copper remains an important metal for the company. Because of that, Barrick and its 50% joint venture partner approved an expansion project at their Zaldivar copper mine in Chile. Barrick also owns a mining concession for the Pascua Lama mineral deposit, which stretches across parts of Chile and Argentina. It's one of the largest untapped silver and gold deposits in the world. It also contains enough copper that Barrick believes it could produce as much as 5,000 tons of it per year.

While Barrick's priority is gold, it has some upside to the copper market that investors won't want to overlook.

Newmont Goldcorp

Newmont Goldcorp is one of the world's leading gold mining companies, created by the 2019 merger of Newmont and Goldcorp. It operates a large portfolio of mines across nine countries that primarily produce gold. In addition, the company mines zinc, lead, silver, and copper.

Newmont Goldcorp operates two mines that produce copper. The largest is the Boddington mine in Australia, which produced 77 million pounds in 2018. Meanwhile, the Phoenix mine in the U.S., which it owns as part of a joint venture with Barrick Gold, produced 32 million pounds of copper in 2018.

Gold is the company's primary moneymaker at more than 90% of the total. It's also its main growth driver. In 2019, for example, Newmont Goldcorp expects its copper production to decline to about 100 million pounds, including 60 million at Boddington and 40 million at Phoenix. However, it does have better longer-term copper growth projects. The company could invest up to $2 billion from 2020 to 2025 into the Yanacocha mine in Peru. That project would supply it with an incremental 500,000 gold equivalent ounces of annual production, though 40% of the revenue would be from selling copper, while gold would account for 50% and silver the other 10%. The company also owns 50% interests in the Nueva Union and Norte Abierto deposits, which are large-scale gold and copper discoveries. Because of that, Newmont Goldcorp has plenty of potential copper upside in the coming years.

Anglo American

Anglo American is a diversified global mining company based in the U.K. It produces diamonds, copper, the platinum metals group, coal, iron ore, nickel, and manganese from mines in Africa, North and South America, and Australia.

The company's copper business consists of interests in two mines in Chile: a 50.1% stake in the Los Bronces mine and a 44% share of the Collahuasi mine. Those mines produce copper as well as by-products like molybdenum and silver that it sells to offset its copper production costs. In 2018, Anglo American's copper output totaled 668 kilotons, which was 15% higher than 2017's total.

Coal was Anglo American's biggest moneymaker in 2018 at 35% of its EBITDA. Copper followed that at 20% while iron ore was at 16% and its investment in De Beers, the world's leading diamond company, contributed 14% of the total.

Anglo American anticipates that its copper output will decline to a range of 630-660 kilotons in 2019. However, production should rise in the future because it approved the development of the Quellaveco mine in Peru in 2018. It's one of the world's largest copper deposits. The $5.3 billion project -- 60% owned by Anglo American -- will produce 300 kilotons of copper per year when it comes online in 2022. Furthermore, the company and its partner Glencore are on track to approve a $1 billion expansion of the Collahuasi mine by 2021, which would add an incremental 80 kilotons of copper output by 2024. Those upcoming expansion projects give Anglo American significant future upside to the growth of the copper market.

Southern Copper

Southern Copper is one of the largest integrated copper producers in the world. The company also produces molybdenum, zinc, lead, coal, and silver from mines in Peru and Mexico.

Southern Copper's corporate structure is one that investors should note. It's a majority-owned subsidiary of Grupo Mexico, which holds shares in several entities focused on the metals, mining, and railway sectors. As of September 2019, Grupo Mexico owned 88.9% of Southern Copper's total outstanding shares, which means that public stock market investors hold a slim minority.

The company was the world's fifth-largest copper producer at 884 kilotons in 2018. It's also one of the lowest-cost copper companies in the world. In 2018, its cash operating cost was $1.54 per pound, which fell to $0.87 per pound after including by-product credits. Overall, copper supplied 80% of Southern Copper's revenue in 2018, followed by molybdenum at 7%, zinc at 5%, silver at 4% and all others contributing another 4%.

Southern Copper has steadily grown its copper output over the years by investing in expanding its mines as well as developing new ones. The company expects its production to reach 987 kilotons in 2019, which is more than double 2010's level. It has several more expansion projects underway, which should boost its cooper output in the coming years. The largest is the $1.4 billion Tia Maria project, which will add 120 kilotons of annual copper output when it comes on line in 2022. Meanwhile, with the second-largest known copper reserves in the world, the company estimates that it can increase its annual production up to 1,800 kilotons by 2026. That has it set to benefit from the anticipated growth of copper demand.

Freeport-McMoRan

Freeport-McMoRan is one of the world's largest publicly traded companies focused primarily on producing copper. The U.S.-based company also produces gold and molybdenum from mines in North and South America as well as Indonesia.

Freeport-McMoRan produced 3.8 billion pounds of copper in 2018. North America led the way at 1.4 billion pounds, followed by 1.3 billion pounds in South America, and 1.1 billion pounds from Indonesia.

As one of the world's largest primary copper producers, changes in its price can have a significant impact on Freeport-McMoRan's cash flow. In 2019, the company estimated that a $0.10-per-pound change in the price of copper from its $2.75-per-pound assumption would impact its operating cash flow by $315 million. That's significant for a company that expected to generate $1.8 billion in cash for the year. Because of that high leverage to the price of copper, its stock price will likely make big moves on even a small change in copper pricing.

Freeport-McMoRan expects its copper output to fall to 3.3 million pounds in 2019 following the government-mandated sale of part of its stake in its Indonesian operations to a local company. However, it expects copper production to start growing again in 2020 and reach 4.2 million pounds by 2021. Driving that growth is the transition to underground mining in Indonesia and an expansion project at its Lone Star mine. This visible growth suggests that Freeport-McMoRan is well poised to benefit from the expected increase in copper consumption in the coming years.

Teck Resources

Teck Resources is Canada's largest diversified mining company. It's the top North American producer of steelmaking coal as well as a large-scale copper and zinc producer. It also produces oil from the oil sands of Western Canada, lead, gold, silver, and specialty metals such as germanium, indium, and cadmium.

Teck Resources holds stakes in four copper mines in Canada and South America. In 2018, these locations produced 294 kilotons of copper and contributed 22% of the company's gross profit. Steelmaking coal, meanwhile, was Teck's biggest moneymaker at 62% of the total while zinc contributed 18%.

While the company expects copper to remain a meaningful contributor in the coming years, it doesn't expect its copper output to increase all that much in the future. In 2019, Teck expects its copper production to be between 290-310 kilotons and be in the range of 285-305 kilotons from 2020 through 2023. That relatively steady anticipated output comes even though the company started work on the Quebrada Blanca 2 project in 2018, which should begin operations in the second half of 2021. Instead of growing output, that expansion project will help offset mine depletion as the company digs through its reserves at existing locations. While this project does position Teck to benefit from higher copper projects, it doesn't have the production growth profile of some of its rivals.

Not all copper stocks are focused on the sector

Most of the world's largest publicly traded mining companies produce copper. For some, copper is crucial; for others, it's an afterthought. Because of that, investors who are interested in the copper sector need to dig deeply into a mining company's operations and outlook. That will enable them to determine the ones best positioned to benefit from the expected growth of the copper sector.