Investing in copper stocks

Southern Copper (US84265V1052) is a Mexican company that has been in the mining industry for 70 years. At the time of writing, the company is 88.9% owned by Grupo Mexico, a Mexican conglomerate active in mining projects. The remaining 11.1% of interests are traded on the New York Stock Exchange. The company has a market cap of approximately $43 billion.

Southern Copper has copper mines in Mexico and Peru. Most of the copper is mined in Mexico. The company, by its own admission, has the largest reported copper reserves of any mining company in the world. It is therefore expected that the company is able to keep on mining with their current reserves for years.

The company plans to increase its production every year until 2028. Southern Copper mines 951 thousand tons of copper annually, and expects to mine 1.9 million tons of copper by 2028. A major advantage of the company is that it is known to extract copper at a low cost. This means that, compared to competitors, more profit is made on the same amount of copper mined.

Western Copper and Gold (CA95805V1085) is a Canadian mining company founded in 1996 and it came on the stock market in 2006. It is traded on the Toronto Stock Exchange and the New York Stock Exchange. The company is not yet making a profit because it is not yet mining resources. They do own several mining rights but production at these sites has yet to be set up.

The largest project that Western Copper and Gold Corporation is yet to set up is the so-called 'Casino project'. This involves a piece of land located in the Yukon Territory of Canada. Since 2007, they have been exploring, doing test drills and obtaining mining rights in the area. The company says it wants to extract raw materials from the ground in a responsible way. In doing so, it is mindful of the environment and the indigenous people of the Yukon.

In the next few years, the company expects to start production. The results from drilling for copper and gold are positive. Rio Tinto (the world's 2nd largest mining company) also has confidence in the project. Rio Tinto purchased about 8% of the shares of Western Copper and Gold Corp in mid-2021.

Freeport-McMoRan (US35671D8570) is an American mining company. It is one of the largest producers of molybdenum and copper in the world. In 2019, 79% of the company’s revenue came from the sale of copper. This makes copper the most important raw material for the company.

Most of the mining sites owned by the company are in the United States. It also has projects in Congo, Finland, Chile, Peru, Indonesia and Spain.

This exchange-traded commodity (ETC) from WisdomTree (GB00B15KXQ89) tracks the price of copper based on futures contracts. On the annual return of this ETC, WisdomTree charges a 0.49% management fee.

Glencore (JE00B4T3BW64) is an Anglo-Swiss mining and trading company. In addition to copper, the company trades aluminum, zinc, lead, petroleum, coal and many other commodities. It is also actively trades agricultural products, such as grain. On every continent except Antarctica, Glencore has projects where raw materials are extracted and/or traded. In 2020, the company produced 1.26 million tons of copper with a market value of $86 billion. This makes copper the most important raw material for the company. In 2021, copper production accounted for 46% of the company's total EBITDA.

In 2015, Glencore came under considerable pressure due to falling commodity prices, leaving the company with significant debt. For this reason, Glencore did not issue dividends for a year and a half and sold several business units to pay off the debt. The company's share price fell significantly during that time. Of the $30 billion debt in 2015, $6 billion was left unpaid in 2021. The company says it will continue to focus on paying off debt and pushing through cost-saving restructuring in the coming years.