BHP and Rio Tinto Surge Overnight: Is the ASX Mining Rally Built to Last?

The Miners Are Back. But Why?

If you checked the overnight numbers this morning, you would have noticed something encouraging. BHP's New York-listed shares jumped 4.5%, and Rio Tinto climbed 3.5%, pointing to a strong open for Australia's two biggest miners on the ASX today.

After a rough week where rising oil prices and Middle East tensions dragged the broader market lower, the rebound feels welcome. But before investors read too much into a single session's move, it is worth understanding what is actually driving it and whether the rally has real staying power.

The short answer? There are two very different forces at work here. One is temporary. The other could reshape the mining sector for years.

Force One: The Geopolitical Bounce

The more immediate catalyst is straightforward. News that the US has paused military strikes on Iranian energy infrastructure eased some of the fear that had been gripping global markets. When risk sentiment improves overnight, large-cap miners that had been heavily sold tend to bounce first. That explains much of last night's move.

This kind of relief rally is real, but it is fragile. If diplomatic talks stall or tensions flare again, the same stocks that bounced can just as quickly retreat. Geopolitical events make for volatile headlines, not durable investment theses.

‍

Force Two: The Copper Story Nobody Is Talking About

Here is where it gets genuinely interesting, and where the longer-term case for BHP and Rio Tinto becomes more compelling.

For the first time in their history, copper has overtaken iron ore as BHP's biggest earnings contributor, accounting for 51% of operating profit in the most recent result. Rio Tinto is on a similar path, with copper's share of earnings doubling in the past year.

This matters because copper is the metal that powers the modern world. Every electric vehicle, solar panel, wind turbine, and data centre requires significant amounts of it. Global demand is rising structurally, while new supply is genuinely hard to find and develop.

According to Bloomberg Intelligence, copper is set to account for more than 35% of diversified miners' total earnings in 2026, up from around 21% just eight years ago. Spot prices currently imply up to 21% upside to consensus earnings forecasts for the sector, the largest potential earnings surprise since early 2025.

Rio Tinto has been particularly aggressive, lifting its copper output by 54% since 2019 through the ramp-up of its Oyu Tolgoi underground mine in Mongolia. BHP is targeting approximately 2 million tonnes of copper production annually by the early 2030s. Both companies are positioning for a world that needs far more copper than it currently produces.

It is also worth noting that BHP's incoming CEO, Brandon Craig, who takes over on 1 July 2026, built his career leading the company's copper expansion across the Americas. The board is effectively signalling that copper is the future of BHP.

The Risk Investors Shouldn't Ignore

No investment story is complete without the other side of the ledger.

Iron ore, the commodity that built BHP and Rio into the companies they are today, is facing a structural challenge. China's steel output fell below one billion tonnes in 2025 for the first time since 2019, and most analysts believe it has now peaked. Iron ore is currently trading around US$105 per tonne, though consensus forecasts from Goldman Sachs and J.P. Morgan point to an average closer to US$93 to US$95 per tonne for the full year- a meaningful headwind for miners still heavily reliant on the commodity.

This means the mining giants are in transition. The copper story is exciting and well-supported, but it takes time to fully replace the earnings engine that iron ore once was.

Key Takeaways for Investors

• Last night's bounce has two drivers: geopolitical relief and genuine copper fundamentals, but only one of them is durable
• Copper has structurally replaced iron ore as the primary earnings engine for both BHP and Rio Tinto, backed by EV, renewables, and data centre demand, with incoming BHP CEO Brandon Craig's background signalling full commitment to that strategy
• Iron ore remains a headwind with spot prices around US$105 per tonne and full-year forecasts pointing lower, making commodity diversification increasingly important within the resources sector

The mining sector is not the same story it was five years ago. For investors looking to navigate this shift, understanding where each commodity sits in the cycle makes all the difference.

‍

‍

Download ASR's free Top-3 Stocks & Market Outlook Report for current analysis on the resources sector and which ASX stocks our team is watching right now. 

‍