For decades, Rio Tinto and BHP have been synonymous with iron ore — the key ingredient in steel that built modern China. But their latest half-year results suggest a quiet transformation is underway: copper, not iron ore, is now doing more of the profit heavy lifting.
In Rio Tinto's Wednesday update, underlying earnings rose 43% to $6.85 billion, and the parts of the business outside iron ore out-earned the iron ore division for the first time in recent memory. Copper and aluminum together made up 56% of that earnings pool, with copper alone accounting for 39%. The momentum gap was stark: copper EBITDA surged 84% while iron ore slipped 1%.
BHP, which reports on a different fiscal calendar, has shown a similar pattern in recent quarters. The two Anglo-Australian giants are increasingly looking like copper companies — and that has big implications for investors who have long viewed them as pure plays on Chinese steel demand.
Why copper is suddenly the star
The shift is driven by two forces: copper prices have been strong, while iron ore prices have stayed range-bound. Copper has benefited from growing demand for electrification — everything from electric vehicles to data centers to renewable energy grids requires large amounts of the red metal. Supply constraints, including mine closures and political instability in key producing regions like Chile and Peru, have also kept prices elevated.
Iron ore, by contrast, has been stuck in a relatively narrow price band as China's property sector remains weak and steel production growth slows. The country's steel mills are running at lower utilization rates, and while infrastructure spending provides some support, it hasn't been enough to push iron ore prices higher.
This divergence is not just a quarterly blip. Analysts at Reuters, including commodities columnist Clyde Russell, have flagged the milestone as a structural shift. In a recent column, Russell noted that Rio Tinto's copper and aluminum divisions are now generating more profit than iron ore — a development that would have seemed unthinkable just a few years ago.
What it means for investors
For everyday investors, this shift changes the risk profile of owning Rio Tinto or BHP stock. Historically, these companies were highly sensitive to China's economic cycle — when China built skyscrapers and high-speed rail, iron ore demand soared. But copper exposure ties them more closely to the global energy transition and industrial electrification, which are longer-term trends less dependent on any single country's property market.
That could make their earnings more resilient over time. Copper demand is expected to grow steadily as governments and corporations pour money into decarbonization. The International Energy Agency has projected that copper demand from clean energy technologies alone could double by 2040.
However, copper prices are not immune to economic downturns. A global recession would hit industrial metals across the board, and copper has historically been volatile. Investors should also note that both Rio Tinto and BHP still have significant iron ore operations — the shift is about the balance of profit, not a complete exit from steelmaking raw materials.
For context, the broader mining sector has been navigating a mixed environment. Copper prices have slipped recently as the dollar firmed and supply tightness in China eased, while aluminum has risen on Middle East supply fears. That volatility is a reminder that commodity stocks can swing sharply with global macro news.
What to watch next
Investors will be watching Rio Tinto and BHP's upcoming production reports for signs that the copper momentum is sustainable. Key questions include: Can copper prices hold above $4 per pound? Will the companies bring new copper mines online fast enough to meet demand? And how will China's economic stimulus efforts affect iron ore demand in the second half of the year?
Both companies have been investing heavily in copper assets. Rio Tinto is advancing the Oyu Tolgoi mine in Mongolia, one of the world's largest known copper deposits, while BHP has been expanding its copper operations in Chile and South Australia. These projects take years to develop and require significant capital, but they position the companies to benefit from the long-term copper supercycle that many analysts predict.
For now, the message from the latest earnings is clear: Rio Tinto and BHP are no longer just iron ore miners. They are becoming diversified metals companies with a growing tilt toward the metals that power the green economy. That evolution is worth watching — and understanding — for anyone with exposure to the mining sector.
