What are next big copper projects? UBS tells when equipment makers could benefit

UBS anticipates a surge in equipment orders for large copper mining projects starting as early as 2025, with significant activity expected in 2026 and beyond, driven by a strong structural outlook for copper demand fueled by electrification. Metso is highlighted as a top pick due to its high copper exposure and leverage to mining capital spending, with copper representing over 40% of global mining capital expenditure. While the timing of orders remains uncertain, historical patterns suggest orders are placed shortly after final investment decisions, potentially benefiting European mining equipment manufacturers.

Analysis

UBS projects a significant upswing in equipment orders for large copper mining projects, potentially commencing as early as 2025 and gaining substantial momentum into 2026 and beyond. This anticipated surge is underpinned by a robust, structural demand outlook for copper, primarily driven by global electrification initiatives, which UBS notes has created a tight market necessitating considerable investment to meet future supply requirements. Copper's critical role is highlighted by its representation of over 40% of global mining capital expenditure, positioning it as the foremost driver of order intake for mining original equipment manufacturers (OEMs). Within this context, UBS has identified Metso (OTC:MXTOF) as its top pick, emphasizing the company's significant exposure to copper and its strong leverage to the mining capital spending cycle. The potential impact of large greenfield projects on OEM order books was exemplified by Pakistan's $6 billion Reko Diq project, whose orders constituted 11% of Metso's 2024 mineral equipment orders. While the precise timing of large orders carries some uncertainty, historical patterns suggest OEMs receive orders shortly after a project reaches its final investment decision (FID). Although some industry participants, like FLSmidth, anticipate an uptick in activity slightly later, starting in 2026, UBS maintains that the bulk of the copper project pipeline is likely to translate into business for OEMs primarily between 2026 and 2028.

Key Decisions for Investors

• Investors should consider evaluating European mining equipment manufacturers, particularly Metso (MXTOF), given its strong copper exposure and UBS's 'top pick' designation ahead of an anticipated capex cycle.
• Monitoring announcements of Final Investment Decisions (FIDs) for major copper projects can serve as a key leading indicator for future equipment order flow and potential stock catalysts for relevant OEMs.
• Given the projected timeline, with significant order activity expected from 2025 and peaking in 2026-2028, a medium to long-term investment horizon may be appropriate for capitalizing on this theme, acknowledging that the bulk of orders may materialize in the later part of this window.