Industry Notes / Mining: copper over iron / Chapter 7 of 8 · Thesis cards

Tax, currency, and by-products

Count the slice of a price rise that never reaches equity

1. 1

   Government takes about 43% first

   36.5%

   BHP FY26 adjusted effective tax rate

   vs

   42.9%

   including mineral royalties

   Price up X → equity up Y needs a ~0.57 multiplier first.

   Elasticity tables that ignore tax overstate shareholder gains.

2. 2

   AUD is a hidden cost

   USD revenue, AUD costs. A 1% AUD rise lifts domestic USD costs by about 1%.

   Track AUD/USD with the same seriousness as iron-ore prices.

3. 3

   Gold is copper’s silent lever

   +45%

   BHP FY26 by-product revenue y/y

   vs

   −73%

   Copper SA unit cost decline from credits

   Rio’s copper C1 net cost even went negative for a stretch. Gold down, cost curve up.

   A copper long embeds a gold long few people hedge explicitly.

Government take is around two fifths; a stronger AUD lifts USD costs; gold is holding copper cash costs down—so a copper long embeds a gold long.

Source：BHP FY26 调整后税率与权益金披露；副产品收入与 Copper SA 成本披露；Rio 铜 C1 净成本公开口径

Research notes, not investment advice.