2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP Group Ltd (ASX: BHP) shares are $38.16 on Thursday, up 0.55%.

BHP is one of the world's biggest mining companies with a diversified asset base that includes iron ore, copper, potash, and coal.

It's one of the world's largest iron ore producers and claims the No. 1 spot for copper production.

Iron ore is its biggest earner, followed by copper.

So, how is BHP placed to navigate the future, given forecasts of a decline in Australia's export earnings for iron ore but a rise for copper?

Let's investigate.

BHP shares in the green on Thursday

The latest resources and energy quarterly published by the Federal Department of Resources provides forecasts through to 2030.

Australia's iron ore export volumes increased by 1.2% year-over-year to 902 million tonnes last year.

Our production is expected to peak within three years as new mines reach their output ceilings.

As for iron ore prices, spot prices have stabilised this year, helped by economic stimulus in China.

But the department expects iron ore prices to weaken from here til 2030 due to softer global demand and rising supply.

Lower steel production in China will be somewhat offset by new production in India, Southeast Asia, the Middle East, and other areas.

This will keep demand for Australian iron ore reasonably stable. But export earnings are expected to decline.

The government expects Australia's iron ore export earnings in real terms to fall from $117 billion in 2024–25 to $109 billion in 2025–26 and $81 billion in 2029–30.

Meanwhile, copper prices are on the rise in 2025 due to strong demand from China and the US.

The government expects copper prices to continue on an upward trajectory as nations invest in low-emissions technologies, data centres, and electrification.

The Department of Resources said:

Prices are expected to persist to 2030, driven by higher demand and a tight concentrate market.

The department projects copper to average US$9,570 per tonne in 2025 and rise to US$9,870 per tonne by 2030 in real terms.

Australia's copper exports are projected to grow from 754,000 tonnes in 2023–24 to 1.1 million tonnes in 2029–30.

Exports will increase due to the expansion of existing mines and the commissioning of new ones.

Export earnings are projected to grow from $11.7 billion in 2023–24 to $17.9 billion in 2029–30 in real terms.

What are BHP's latest production numbers for FY25?

BHP generated record iron ore and copper production over the first three quarters of FY25, according to its latest report.

Copper production was up 10% to 1.5 million tonnes over the three quarters.

This was due to a 20% increase in output at the Escondida mine in Chile and strong output from the Spence mine in Chile and Copper South Australia.

BHP sold its copper for an average realised price of US$4.19 per pound.

That was up 13% from the prior corresponding period (pcp).

BHP also mined 193 million tonnes of iron ore over the three quarters, up 1% pcp.

The company sold its iron ore for an average realised price of US$82.93 per wet metric tonne (wmt).

That was down 21% pcp.

How does the future look for BHP copper?

BHP has expanded its copper assets and production in recent years.

BHP bought the formerly listed copper pure-play Oz Minerals in 2023. It tried to buy Anglo American plc in 2024.

Last month at the Bank of America 2025 Global Metals, Mining and Steel Conference in Spain, BHP CEO Mike Henry said:

Copper now delivers 39% of our EBITDA – one of the highest percentages among major diversified miners.

By the end of the financial year, we expect to have grown copper production by 24% over a 3-year period.

Henry pointed to good organic growth in the company's copper segment for now, with growth set to surge in the 2030s.

In the Q&A session, Henry responded to a question about whether BHP might purchase new copper assets in the medium term.

So first of all, I do just want to come back to how much we've grown EBITDA and copper production over recent years.

Having said that, I recognize there's this period of flat, where the growth for us only really takes off in the 2030s.

And yes, we've been positive on copper, we've also been super positive about needing to stay disciplined and only investing for value.

And frankly, right now, the opportunities to create value for shareholders through acquisitions of current producing assets or assets that have near-term growth look pretty challenging, given where multiples are at currently.

What about iron ore?

BHP is aiming to increase its production to 305 million tonnes annually within the medium term.

Henry pointed out that BHP's Western Australia Iron Ore (WAIO) has been the world's lowest-cost major iron ore producer for five years.

Over the past 5 and a half years, it's delivered average EBITDA margins of 69%… an average return on capital of 62%… and very high free cashflow.

Despite China's economic downturn, Henry is positive about the future of demand:

We see market fundamentals as well supported in the near to medium term.

China is set to maintain 1 billion tonnes of steel production for several years to come.

What do the brokers say about BHP shares?

According to CommSec, the consensus analyst recommendation on BHP shares is a moderate buy.

As for individual brokers, Goldman Sachs has a buy rating on BHP shares with a price target of $45.10.

The broker likes BHP due to its copper exposure and superior free cash flow generation.

The broker also notes that BHP shares are trading at below-average multiples.

Macquarie has an outperform rating on BHP shares with a $42 target.

The BHP share price has fallen 13% over the past 12 months.

The post 2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares? appeared first on The Motley Fool Australia.

Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bank of America, Goldman Sachs Group, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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