Insights

Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand

Here’s how electric vehicles could be a boom for BHP earnings.
The post Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand appeared first on The Motley Fool Australia. –

The BHP Group Ltd (ASX: BHP) share price has historically been influenced by the price for iron ore. But another commodity could soon have an important role to play.

BHP may be best known as an iron ore miner, however, it has exposure to other commodities such as copper and nickel.

According to reporting by the Australian Financial Review, BHP Nickel West (owned by BHP) is going to spend more on exploration than it has in the past 15 years.

The reason for the ramp-up is the strong demand for electric vehicles. This could mean good things for nickel.

Untapped resource

The asset president of BHP Nickel West, Jessica Farrell, made some promising comments at the Diggers and Dealers mining conference this week.

Farrell said:

We have a large nickel sulphide resource with in excess of 7.4 million tonnes of nickel in the Agnew-Wiluna belt that still remains largely unexplored.

That’s exciting. We have budgeted a significant uplift in exploration spend over the next two years, which we expect will advance many of our targets. To underscore this point, this year will be the highest annual spend for exploration in Nickel West since BHP acquired the WMC assets in 2005, a testament to the focus and commitment BHP has to its nickel business right now.

According to reporting by the AFR, BHP has 120,000 hectares of tenements within the Agnew-Wiluna belt in WA. Farrell continued:

This is a highly prospective strip, approximately 150 kilometres long … and has a number of deposits that we are looking to understand further and potentially mine.

Our acquisition of the Honeymoon Well and Albion Downs tenements in 2020 continues to drive our growth plans and drilling to inform our mine studies.

Global outlook

Some of the major car companies like Tesla and Ford have reportedly signed agreements with some Australian miners, including BHP. The company has also signed agreements with Toyota.

The AFR reported that Russia supplies around a fifth of battery-grade nickel globally, with its supply disrupted due to the invasion of Ukraine.

Yet, the demand for nickel is expected to keep rising. This could be helpful for the BHP share price.

Farrell said:

Electrification of autos is gathering pace, and we expect that by 2030, around 60 per cent of all car sales will be electric. We expect that by 2040, 90% of car sales will be electric. The dominant battery chemistry powering this global fleet is expected to rely on nickel.

Latest nickel update

BHP said that in the three months to 30 June 2022, nickel production was up 1% to 18.8kt. There was higher volume due to reduced COVID-19 labour impacts.

The resources giant also said that the nickel price in FY22 was 43% higher than FY21.

Production in FY23 is expected to be between 80kt to 90kt, weighted to the second half of the year due to planned smelter maintenance in the first half.

BHP share price snapshot

Over the last month, the BHP share price has fallen around 3%.

The post Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Top brokers name 3 ASX shares to buy today
Broker names 3 of the best ASX shares to buy in August
Is the iron ore price entering a bear market?
Why did the BHP share price slump 6% in July when the ASX 200 leapt higher?
Why is the Fortescue share price sliding on Tuesday?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info