Goldman Sachs on Australia Metals and Mining: Staying Positive on Copper; Revisiting Base Metals and Diversified Valuations and the Global Mining M&A Landscape Ahead of the September Quarter
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs remains near-term bullish on copper, citing low global inventories and potential US copper tariffs, and lifted its 2027 copper forecast to US$6.3/lb (US$13,900/t), alongside higher copper, aluminum, zinc, coal and freight assumptions. Real global metals demand is soft (roughly 0-2%) but offset by supply disruptions (coking coal, aluminum), hoarding (copper), China decoupling (rare earths, minor metals) and cost-curve pressure (iron ore, lithium). Diversified miners now trade around 7-8x NTM EBITDA versus a roughly 6.5-7x 25-year average, while FCF yields sit at five-plus-year lows; S32, SFR and MIN cancelling or not declaring minimum dividends marks a partial swing back to pro-cyclical capital allocation. M&A remains in focus: a Spence-Sierra Gorda MoU/JV could unlock US$2-4bn of synergies, and S32 agreed a bauxite/alumina deal with Alcoa. BHP's FY26 EBITDA of about US$33bn beat expectations, with a US99c final dividend (72% payout). Top picks are RIO (Buy, US$178.6) and BHP (Buy, US$65.5), with BSL, LYC and ILU also Buy; FMG (low FCF) and NHC (valuation) are Sell. September-quarter results should confirm continued base metals tailwinds, with catalysts including BHP's Vicuna FID and RIO's targeted US$5bn of asset sales by end-2026 plus a US$1.8bn cost-reduction target.
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
