BHP Group Ltd (ASX: BHP) shares are up 0.54% today to $44.35 following a 2.75% bump in the iron ore price overnight to US$112 per tonne. The iron ore price has risen 7.2% this week.
But it may be a short-term rise for BHP shares if top broker Goldman Sachs is on the money with its latest projections for the commodity.
Goldman says China's recovery is sluggish and iron ore supply will continue to outpace demand in 2024.
As we reported this week, the broker has cut its three-month price target for iron ore to US$80 per tonne. Its 2H FY23 target is now US$90 per tonne.
But BHP shares don't just move with the iron ore price. The ASX mining giant also earns significant revenue from copper and coal.
How will copper boost BHP shares in the future?
BHP recently announced a new technology partnership with Microsoft Corp (NASDAQ: MSFT) to improve its operations at the Escondida mine in Chile.
The companies have been using used artificial intelligence (AI) and machine learning to try to improve copper recovery.
This is important because copper is set to play a key role in the world's decarbonisation, yet there are few opportunities to build new economical mines, so extracting more from existing mines is a worthwhile goal.
Of course, if BHP can increase its copper production at existing assets, this could boost earnings, which may have a flow-on effect on the price of BHP shares and, possibly, the dividend yields they pay.
In its statement, BHP explains:
By using real-time plant data from the concentrators in combination with AI-based recommendations from Microsoft's Azure platform, the concentrator operators at Escondida will have the ability to adjust operational variables that affect ore processing and grade recovery.
BHP says global copper production needs to double over the next 30 years, relative to the past 30, to keep pace with the development of EVs and offshore wind and solar farms.
BHP chief technical officer Laura Tyler says:
We expect the next big wave in mining to come from the advanced use of digital technologies.
As grades decline at existing copper mines and fewer new economic discoveries are made, next-generation technologies like artificial intelligence, machine learning and data analytics will need to be used to unlock more production and value from our existing mines.
A bit about Escondida
Escondida is the world's largest producer of copper concentrates and cathodes.
Copper cathodes provide the positive electrode in lithium-ion batteries that power electric vehicles (EVs).
The mine is more than 30 years old and is owned by BHP (57.5%), Rio Tinto Ltd (ASX: RIO) (30%), and the Japanese consortium, JECO Corporation (12.5%).
It produces about 1.2 million tonnes of copper a year, which is 5.5% of global production.
Corporate vice-president of Microsoft's AI Platform, John Montgomery says:
We are excited to partner with BHP on this transformative project that demonstrates the power of AI, machine learning and cloud technologies.
