The opportunity: Copper and critical mineral demand outpacing supply

Over the last 10 years, there has been a global population redistribution. For the first time, more of the world’s population lives in urban centers than in rural areas. Along with this shift has come greater densification, which has pushed electrical grids to their limits.

However, as Henry pointed out, this is just the beginning. By 2050, the global population will grow by 25 percent to 10 billion people, and the vast majority of them will live in urban centers.

“They are the engines of massive opportunity for our industry. More high rises, homes, roads and infrastructure, greater electrification, more phones, televisions, cars and air conditioning. More energy, more data centers to power AI and cloud computing,” he said.

This population boom means the world will need more of everything, from copper and steel to potash and other minerals.

As a company, BHP is a global powerhouse. Its portfolio of assets touches on a variety of minerals that will be critical in the coming decades; few, however, may be as important as copper. Henry suggests that demand for red metal will rise 70 percent over the next 15 years.

The massive surge in demand presents an enormous opportunity for the resource sector, especially for investors. Outlining the scale of capital required, Henry estimates that more than US$250 billion will be needed for mining and concentration to keep pace with demand growth, with additional funding needed for smelting and refining — and that’s just for copper.

When other minerals are added to the equation, the total could reach US$800 billion between now and 2040.

The first challenge: Finding significant critical mineral deposits in Canada

Although opportunities exist, they don’t come without challenges, and Henry suggests that the challenges exist both above and below ground.

“First, we’re going to have to find the resources… Those resources are big, large deposits that are becoming harder to find,’ he said. ‘They’re deeper, they’re more remote, they come with new technical challenges, and they’re often in riskier jurisdictions.’

This has led to BHP rethinking how it invests in exploration, seeing them not only fund and carry out exploration work itself, but partnering with other companies around the world.

Some of these partnerships have seen work being carried out in Canada with Henry suggesting considerable untapped resources in the country.

“Of course, Canada has extensive exploration history already, yet much of this has been at shallow depths in subaortic areas. So there remains potential to find deeper or underexplored parts of the country, and we’re engaged in that effort with a specific focus on copper,” he said.

The solution, he said, is to apply new technologies from other sectors, including 3D seismic sensors and muon tomography. However, this new technology generates huge amounts of data, which benefits from advances in artificial intelligence to help make sense of all the information being collected.

Henry says that BHP has taken a different approach to partnerships by borrowing from the tech sector.

“We’ve also borrowed the accelerator concept from big tech, and we are supporting innovative exploration technologies, methods, and ideas through our global accelerator program, BHP Explorer,” Henry said.

The implications are enormous for an industry that needs new ideas brought to the forefront in short timelines.

The second challenge: Government mining policies

However, the biggest challenge facing the resource sector comes not from within the industry but from outside it.

Henry suggested that the biggest changes can come from evolving government policy, and he thinks things are beginning to move in the right direction. Canada itself released a critical minerals strategy in 2021, and its latest update includes 34 minerals and metals.

“There has been a very welcome burst of renewed government interest in critical minerals in recent times, and the motivations do vary,” he said.

For some governments, this interest stems from a desire to use resources to unlock the economic opportunity associated with decarbonizing the global energy grid. Meanwhile, other governments are pursuing critical minerals needed to provide energy security, economic sovereignty and defense supply chain resilience.

Henry noted that some countries are taking steps to make themselves more competitive and are working to attract capital investment for projects through fiscal reform and tax credits. He also pointed out that some governments are streamlining the regulatory process, which he suggests will speed up development time and reduce risks.

Henry sees incredible benefits in Canada due to the strength of the mining sector, but he cautions that past successes aren’t indicative of future success. He believes Canada is in danger of missing out on the next great opportunities in the resource sector.

“Other countries have some mix of even better resource endowments in certain commodities, better tax and royalty regimes, more streamlined permitting processes, while still maintaining high standards and more productivity, enabling industrial relations framework,” Henry said.

Henry sees complacency and bureaucracy as the enemy of growth and economic security, and believes Canada needs to accelerate its efforts to match those being carried out elsewhere.

In comparison, he points to Chile, where he says they’ve accelerated permitting for multi-billion dollar greenfield projects to five to 10 years and even shorter for brownfield developments. In Canada, he said, those timelines stretch to 10 to 15 years.

“Global capital is going to flow to the best opportunities, risk return opportunities globally. So if a country isn’t constantly benchmarking and saying, what’s the combined effect of our industrial relations policies, our tax settings, our permitting process relative to the other countries that are chasing the same opportunity, we run the risk of falling behind,” Henry said.

What does this mean for investors?

Henry outlined a potential for staggering growth in the mining sector for critical minerals such as copper over the next 15 to 20 years. He suggested there is an opportunity for investors looking to get into the sector at all levels, from exploration to production.

He also noted that it is not without problems. When investors evaluate projects, especially early in development, they should recognize that a multitude of factors could determine their success or failure.

Henry touched on access to the resource, the depth of the deposit and its remoteness. He also noted that jurisdictions play a huge part in a project’s success, so investors should research a country’s permitting process and tax system, as well as why a country may look to fast-track projects and whether it affects a company’s risk analysis.

“Once capital mobilizes in one direction, sometimes it can be quite hard to mobilize back in the other,” Henry said.

What is CNN’s Fear and Greed Index?

CNN’s Fear and Greed Index is a tool designed to measure the prevailing emotions influencing the stock market by weighing seven key indicators.

The Fear and Greed Index operates on a scale from 0 to 100, with a score under 45 indicating fear, a score of 55 and above signifying greed, and one in between marked as neutral. Scores of under 25 and above 75 are labeled Extreme Fear and Extreme Greed, respectively.

How is CNN’s Fear and Greed Index calculated?

The index aggregates seven key indicators, each reflecting different aspects of market sentiment:

1. Stock Price Strength – Tracks the number of stocks hitting 52-week highs versus those reaching 52-week lows.
2. Stock Price Breadth – Examines trading volume in advancing versus declining stocks.
3. Put and Call Options – Analyzes the ratio of bearish (put) options to bullish (call) options.
4. Junk Bond Demand – Measures the yield spread between high-yield (junk) bonds and safer investment-grade bonds.
5. Safe Haven Demand – Assesses the relative performance of stocks versus government bonds.

When these indicators collectively signal heightened caution, the Fear and Greed Index falls into the fear zone, with Extreme Fear indicating widespread pessimism in the markets.

Other instances of Extreme Fear

Understanding past instances of Extreme Fear can provide insights into current market conditions. The last two notable times the index hit Extreme Fear were August 5, 2024, and December 19, 2024.

1. August 5, 2024: Global sell-off and economic uncertainty

On August 5, 2024, markets saw a sharp decline following weak tech earnings and US employment data, accelerated by an unexpected interest rate hike by the Bank of Japan resulting in investors trying to unwind their yen carry trades. This caused a ripple effect across global markets:

• Japan’s Nikkei index plummeted 12 percent in a single session.
• The International Monetary Fund (IMF) warned that the volatility could be a precursor to prolonged instability.

2. December 19, 2024: Federal Reserve’s hawkish stance

Investor fears resurfaced in mid-December when the US Federal Reserve signaled that interest rates would likely remain elevated longer than expected. The announcement sent shockwaves through the markets:

• The US dollar surged to a two-year high, weighing heavily on emerging markets.
• Cryptocurrencies took a hit, with Bitcoin dropping over 15 percent in a week.

How do other fear-based indices compare?

While CNN’s Fear and Greed Index is a popular barometer of market sentiment, it isn’t the only fear-based indicator worth watching. Here’s how other major sentiment gauges compare:

Crypto Fear & Greed Index

The Crypto Fear & Greed Index tracks investor sentiment in the cryptocurrency market. Crypto markets are particularly sensitive to risk-off sentiment, making this index an important measure for digital asset investors.

The Crypto Fear & Greed Index has also dropped into Extreme Fear with a score of 15 on March 4. This decline coincided with continued geopolitical tensions, particularly US President Donald Trump’s announcement of new 25 percent tariffs on Canada and Mexico that day.

Doomsday Clock

Though not a financial index, the Doomsday Clock, updated annually by the Bulletin of Atomic Scientists, reflects global existential risks, including nuclear tensions, climate change and geopolitical instability.

As of January 28, 2025, the clock is at 89 seconds to midnight, signaling heightened global uncertainty, which can influence investor sentiment in risk assets like equities and cryptocurrencies.

What Extreme Fear means for investors

The plunge of CNN’s Fear and Greed Index into Extreme Fear territory signals widespread investor anxiety. But is this a warning of further declines, or a contrarian buy signal?

Historically, moments of extreme fear have often preceded strong market rebounds, as panicked selling creates opportunities for value investors. However, not all instances lead to immediate recoveries — some mark the beginning of prolonged downturns.

Key considerations for investors:

• Economic data: Keep an eye on employment reports, inflation data and GDP growth figures.
• Federal Reserve policy: Interest rate decisions will continue to be a key driver of market sentiment.
• Corporate earnings: Weak earnings reports could exacerbate investor fears, while strong results may signal resilience.
• Geopolitical developments: Trade tensions, global conflicts and macroeconomic policies can shift market sentiment quickly.

While fear-based indicators provide valuable insights, investors should use them alongside fundamental and technical analysis to make informed decisions.

Whether this moment marks a temporary panic or the start of a broader downturn remains to be seen, but one thing is clear: investors should be prepared for volatility in the weeks or months ahead.