ASX investors buy gold stocks for many reasons. Perhaps it might be the leveraged exposure to the price of gold that gold miners can provide. It could be a desire to hedge against inflation, deflation or economic or geopolitical uncertainty. It might even be to invest in what many people perceive to be a 'real' currency.
But most ASX gold stock investors probably don't buy a gold miner for its copper pipeline. Yet that's exactly what one of the ASX's largest gold miners is reportedly investing in today.
Newmont Corporation (ASX: NEM) is one of the newest gold miners on the Australian share market. It only officially joined the ASX boards in October last year as a result of the US-based Newmont acquiring what was Australia's largest gold miner at the time – Newcrest Mining – in full.
As part of this takeover deal, Newcrest shares left the ASX, with Australian investors receiving ASX-listed Newmont stock in their place.
At the time, the deal was one that Newcrest investors found too compelling to turn down. After all, Newmont is one of the largest gold miners in the world. And the addition of Newcrest's portfolio to Newmont's already impressive stable of long-life gold mines would enhance this reputation even further.
But according to fresh reporting, Newmont is focusing just as much on the red metal as the yellow one going forward.
ASX gold stock CEO sees a red future
Newmont CEO Tom Palmer spoke to the Melbourne Mining Club this week, as reported by The Sydney Morning Herald (SMH). In this interview, Plamer stated that Newmont's future project pipeline "is all copper".
Newmont is reportedly considering a joint venture with industrial metals giant BHP Group Ltd (ASX: BHP) in order to tap into BHP's "significant copper reserves" in the wake of the latter's failed bid for diversified British miner Anglo American plc (LSE: AAL)
Palmer described the global demand for copper as "tectonic", opening up opportunities across the mining sector:
The world is going to continue to see the demand for copper drive opportunities where you can buy or where you can build… Whether that's BHP or other mining companies, that is an important part of how we look at developing that project pipeline.
Newmont currently produces around 150,000 tonnes of copper annually, but Palmer is hoping to expand this production base by focusing on Newmont's opportunities in Canada and Papua New Guinea.
The ASX gold stock has even indicated it could use proceeds from selling some of its lower-grade projects, such as Western Australia's Telfer mine, to help expand its copper operations.
Gold is a rather unusual commodity, with the vast majority of produced metal going into jewellery and bullion. Only a small fraction of the world's annual gold production ends up in industrial applications. In contrast, copper is a foundational metal in the global economy.
The rise in future-facing technologies like electric vehicles and renewable energy has seen many experts forecast a massive supply crunch for the red metal in coming years.
Clearly, Newmont is paying attention. Let's see what happens with this massive gold (and copper) miner going forward.
