ASX mining shares that are exposed to long-term growth trends could be a good area to look for investing opportunities.
I don't know what the demand for iron ore or coal looks like over the next five years, but the outlook for copper demand seems appealing as countries expand their electricity transmission grids, electric vehicle fleets, and renewable energy.
Rio Tinto Ltd (ASX: RIO) points out that copper is going to play an essential role in the transition to the low-carbon economy.
Just one 1MW wind turbine, for example, uses three tonnes of copper. And electric vehicles have a copper intensity three to four times higher than traditional vehicles. As a result, global demand for copper is set to grow 1.5%-2.5% per year, driven by electrification and increasing requirements for renewable energy.
With that backdrop, I think that the below two ASX mining shares could make compelling opportunities.
Sandfire Resources Ltd (ASX: SFR)
Sandfire is an ASX copper miner that started with the high-grade DeGrussa copper-gold deposit in Western Australia. The cash flow from that project enabled it to grow to other continents.
It acquired MATSA Mining in Spain for US$1.865 billion and it's also developing the long-life copper project in Botswana, the Motheo copper mine. Motheo recently produced its first copper concentrate.
The ASX mining share also has what it describes as a "vast, high-quality exploration portfolio" spanning Australia, the Kalahari 'copper belt' in Botswana and Namibia, Montana in the USA, and the Iberian Pyrite belt in Spain and Portugal.
With global copper demand expected to increase in the coming years, Sandfire is well-positioned to take advantage with its growing portfolio of projects.
Aeris Resources Ltd (ASX: AIS)
Aeris is one of the smaller ASX mining shares that's actually producing a commodity.
It has a portfolio of operating and developing projects, though it's largely focused on copper. The company has its Tritton copper project in NSW, Cracow gold operations in Queensland, Jaguar operations (zinc, copper and silver) in Western Australia, its North Queensland copper operations, and it's working on the Stockman (copper and zinc) project in Victoria.
The business has no debt and is expecting to make between $50 million to $70 million of earnings before interest, tax, depreciation and amortisation (EBITDA) in FY23.
It seems really cheap to me if it's able to ramp up its profitability, thanks to the expected increase in production.
According to Commsec, it's valued at less than 5x FY24's estimated earnings and less than 4x FY25's estimated earnings. This seems exceptionally cheap to me and in a couple of years, I wouldn't be surprised if the Aeris share price was 50% higher. It would still seem cheap even at that value, in my opinion, considering the compelling growth outlook for copper in the coming years.
