Copper

copper metal in various shapes
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What are the best copper stocks on the TSX so far this year? These three companies have seen the biggest gains year-to-date.

Top 3 Copper Stocks on the TSX in 2022
Company Description
1. Turquoise Hill Resources (TSX:TRQ)

Year-to-date gain: 86.89 percent; market capitalization: C$8.05 billion; current share price: C$38.93

Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to run for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by major global miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The Oyu Tolgoi mine has been in production since 2013.

The company performed well through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill's share price up nearly C$9 the day of the announcement. Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share.

On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point, and the next step is a shareholder vote. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8.

However, International Shareholder Services has recommended that shareholders reject the takeover offer, as the firm believes C$43 per share still does not reflect the company’s value; this echoes the concerns of some majority shareholders. Turquoise Hill has responded, requesting that shareholders vote in favor of the transaction. The results of the vote are still undetermined.

With regards to progress at Oyu Tolgoi, on August 22, Turquoise Hill provided an update, including the latest news on updating the project’s integrated mine plan. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in Q4 of this year. In Q3 alone, the mine produced 36,000 MT of copper.

2. Filo Mining (TSX:FIL)

Year-to-date gain: 26.17 percent; market capitalization: C$1.88 billion; current share price: C$16.15

Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border.

Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). The company’s share price rose to reach a peak of C$24.44 on April 18 before falling through mid-May to C$16.62. However, the day after that low, Filo's share price rocketed back up on positive drill results that extended the Breccia 41 zone at Filo del Sol.

Further positive exploration news continued to drive the company's share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it has been included in the S&P/TSX Composite Index (INDEXTSI:OSPTX). The company released its Q2 results in August, discussing the progress made at Filo del Sol over the quarter, including very high-grade drill results and the discovery of a copper-gold porphyry center, dubbed the Bonita zone, at the project.

“Exploration results from Filo del Sol continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation,” President and CEO Jamie Beck said in a release.

In September, Filo Mining appointed Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects, as well as Ron Hochstein to its board of directors. Its most recent exploration results from ongoing exploration at Filo del Sol’s Aurora zone saw highlights including 1.54 percent copper, 12.08 grams per MT (g/t) gold and 20.5 g/t silver over 4 meters.

While the company’s share price has fallen from its highs seen in June, it is still up year-to-date.

3. Polymet Mining (TSX:POM)

Year-to-date gain: 15.17 percent; market capitalization: C$391.68 million; current share price: C$4.05

PolyMet Mining’s flagship project is its NorthMet copper-nickel project, which is also expected to produce cobalt and precious metals. NorthMet is located in Minnesota, US, in the Duluth Complex, and has proven and probable reserves of 290 million MT grading 0.288 percent copper and 0.083 percent nickel. The company is working to secure permits that will allow it to begin mining.

Although PolyMet’s share price performed relatively flatly for the early part of the year, it saw a spike from C$3.74 on March 7 to C$5.06 the following day; the company released no news to accompany this rise. PolyMet fell back down to the C$4 to C$4.50 range in the following weeks, during which time it shared its 2021 financial results and a Q1 business update. Shares did experience another jump, hitting a year-to-date high of C$5.17, this time following the March 29 news that Senior Vice President Richard Lock was moving on. PolyMet’s share price fell through the second quarter.

On July 20, PolyMet announced the significant news that it was creating a 50/50 joint venture with Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) subsidiary Teck American. The companies' respective NorthMet and Mesaba projects will be under a single management team, an entity named NewRange Copper Nickel. According to a press release, the projects “represent two of the largest undeveloped clean energy mineral resources in the U.S.” However, the news did not drive the company’s share price significantly in either direction. Although PolyMet has not released further news this year, it reached a Q3 high of C$4.50 in September.

Is copper a good investment in 2022?

While the metal is currently trending down in terms of its price, experts see that as a symptom of COVID-19 lockdowns in China, as well as other short-term headwinds. So when will the copper price go back up? Economists are divided, but many believe it will be back up within the next couple of years.

With the volatility and unpredictability of markets and economies at the moment, nothing is guaranteed, but it can be worth getting into a market when prices are depressed if it matches an investors’ portfolio goals.

What is copper used for?

Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.

Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.

How to invest in copper?

Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.

For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange

How to invest in a copper ETF?

Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.

In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.

There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).

How much is copper worth?

The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.

Since the start of 2022, copper has seen historically high prices. In Q1 and most of Q2, copper prices on the COMEX ranged between US$4.10 and US$4.89 ⁠— an all-time high. For the same time period on the LME, copper moved between US$9,000 and US$10,730. Q3 has brought lower prices for the metal, which has seen year-to-date lows of US$3.21 and US$6,998, respectively.

Where is copper mined and how is it processed?

Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2021, putting out 5.6 million MT of the metal. Rounding out the top five are Peru with 2,200 MT, China and the Democratic Republic of Congo with 1,800 MT each and the US with 1,200 MT.

Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.

The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.

Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network's guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.

Click here to read the previous best TSX copper stocks article.

After seeing success earlier this year — including a leap to an all-time high of US$10,910 per metric ton (MT) — copper has faltered in the third quarter, although it remains above its year-to-date low.

Tailwinds are largely coming out of China, where strict COVID-19 lockdowns have curtailed infrastructural copper demand. In the short term, some market watchers believe prices will fall further, but long-term factors, including copper's role in the green revolution, look positive. As of October 25, copper was priced at US$7,534 per MT.

“The bottom line is that if we want to have an energy transition, we need copper — it is vital for us,” ERG Senior Market Analyst Piotr Ortonowski told the audience at the Fastmarkets copper conference in Barcelona. “And judging from the level of physical inventories today, supply is already falling short of demand.”


The list below shows the top-performing TSX-listed copper stocks by share price performance so far this year. It was generated on October 21, 2022, using TradingView’s stock screener, and only TSX copper companies with market capitalizations greater than C$50 million at that time are included. Read on to learn more about what's moving their share prices.

1. Turquoise Hill Resources (TSX:TRQ)

Year-to-date gain: 86.89 percent; market capitalization: C$8.05 billion; current share price: C$38.93

Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to run for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by major global miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The Oyu Tolgoi mine has been in production since 2013.

The company performed well through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill's share price up nearly C$9 the day of the announcement. Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share.

On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point, and the next step is a shareholder vote. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8.

However, International Shareholder Services has recommended that shareholders reject the takeover offer, as the firm believes C$43 per share still does not reflect the company’s value; this echoes the concerns of some majority shareholders. Turquoise Hill has responded, requesting that shareholders vote in favor of the transaction. The results of the vote are still undetermined.

With regards to progress at Oyu Tolgoi, on August 22, Turquoise Hill provided an update, including the latest news on updating the project’s integrated mine plan. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in Q4 of this year. In Q3 alone, the mine produced 36,000 MT of copper.

2. Filo Mining (TSX:FIL)

Year-to-date gain: 26.17 percent; market capitalization: C$1.88 billion; current share price: C$16.15

Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border.

Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). The company’s share price rose to reach a peak of C$24.44 on April 18 before falling through mid-May to C$16.62. However, the day after that low, Filo's share price rocketed back up on positive drill results that extended the Breccia 41 zone at Filo del Sol.

Further positive exploration news continued to drive the company's share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it has been included in the S&P/TSX Composite Index (INDEXTSI:OSPTX). The company released its Q2 results in August, discussing the progress made at Filo del Sol over the quarter, including very high-grade drill results and the discovery of a copper-gold porphyry center, dubbed the Bonita zone, at the project.

“Exploration results from Filo del Sol continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation,” President and CEO Jamie Beck said in a release.

In September, Filo Mining appointed Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects, as well as Ron Hochstein to its board of directors. Its most recent exploration results from ongoing exploration at Filo del Sol’s Aurora zone saw highlights including 1.54 percent copper, 12.08 grams per MT (g/t) gold and 20.5 g/t silver over 4 meters.

While the company’s share price has fallen from its highs seen in June, it is still up year-to-date.

3. Polymet Mining (TSX:POM)

Year-to-date gain: 15.17 percent; market capitalization: C$391.68 million; current share price: C$4.05

PolyMet Mining’s flagship project is its NorthMet copper-nickel project, which is also expected to produce cobalt and precious metals. NorthMet is located in Minnesota, US, in the Duluth Complex, and has proven and probable reserves of 290 million MT grading 0.288 percent copper and 0.083 percent nickel. The company is working to secure permits that will allow it to begin mining.

Although PolyMet’s share price performed relatively flatly for the early part of the year, it saw a spike from C$3.74 on March 7 to C$5.06 the following day; the company released no news to accompany this rise. PolyMet fell back down to the C$4 to C$4.50 range in the following weeks, during which time it shared its 2021 financial results and a Q1 business update. Shares did experience another jump, hitting a year-to-date high of C$5.17, this time following the March 29 news that Senior Vice President Richard Lock was moving on. PolyMet’s share price fell through the second quarter.

On July 20, PolyMet announced the significant news that it was creating a 50/50 joint venture with Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) subsidiary Teck American. The companies' respective NorthMet and Mesaba projects will be under a single management team, an entity named NewRange Copper Nickel. According to a press release, the projects “represent two of the largest undeveloped clean energy mineral resources in the U.S.” However, the news did not drive the company’s share price significantly in either direction. Although PolyMet has not released further news this year, it reached a Q3 high of C$4.50 in September.

FAQs for investing in copper

Is copper a good investment in 2022?

While the metal is currently trending down in terms of its price, experts see that as a symptom of COVID-19 lockdowns in China, as well as other short-term headwinds. So when will the copper price go back up? Economists are divided, but many believe it will be back up within the next couple of years.

With the volatility and unpredictability of markets and economies at the moment, nothing is guaranteed, but it can be worth getting into a market when prices are depressed if it matches an investors’ portfolio goals.

What is copper used for?

Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.

Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.

How to invest in copper?

Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.

For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange

How to invest in a copper ETF?

Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.

In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.

There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).

How much is copper worth?

The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.

Since the start of 2022, copper has seen historically high prices. In Q1 and most of Q2, copper prices on the COMEX ranged between US$4.10 and US$4.89 ⁠— an all-time high. For the same time period on the LME, copper moved between US$9,000 and US$10,730. Q3 has brought lower prices for the metal, which has seen year-to-date lows of US$3.21 and US$6,998, respectively.

Where is copper mined and how is it processed?

Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2021, putting out 5.6 million MT of the metal. Rounding out the top five are Peru with 2,200 MT, China and the Democratic Republic of Congo with 1,800 MT each and the US with 1,200 MT.

Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.

The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.

Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network's guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.

Copper Outlook:

MARKETS

Markets
TSX19990.36+646.11
TSXV594.69+17.36
DOW33715.37+1201.43
S&P 5003956.370.00
NASD11114.150.00
ASX6964.00-35.30

COMMODITIES

Commodities
Gold1765.55+14.24
Silver21.610.00
Copper3.88+0.12
Palladium2037.00+71.50
Platinum1042.00+11.37
Oil89.15+2.68
Heating Oil3.64+0.07
Natural Gas6.40+0.16

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