FLSmidth is one of the world's leading suppliers of engineering, equipment and service to the global mining industry — with a particular strength in copper and cement mining. The LME Copper price is the primary cycle driver because mining companies only invest in new equipment when commodity prices justify expansion capex. When copper falls below $5,000/tonne, mine capex freezes; when it recovers above $9,000/tonne, equipment orders surge.
Why Copper Drives FLSmidth
FLSmidth's mining division supplies grinding mills, flotation cells, thickeners and full mine processing plants — primarily for copper and gold mines. These are multi-year, multi-hundred-million-dollar projects that are only sanctioned when the commissioning mine expects to operate profitably at forecast commodity prices. When LME Copper falls below $5,000/tonne, new mine projects are cancelled and FLSmidth's order intake collapses. When copper recovers, the order pipeline rebuilds rapidly.
The 2016–2018 Copper Cycle: +120% in 29 Months
LME Copper fell below $5,000/tonne in January 2016. FLSmidth fell to DKK 200 as mining capex froze globally. The copper recovery — driven by Chinese supply-side reforms and accelerating EV demand — pushed prices above $9,000/tonne by June 2018. FLSmidth reached DKK 440 — a gain of 120% in 29 months, outperforming the pure copper miners (Glencore +164%, Antofagasta +69%) on a percentage basis due to its operating leverage to order intake recovery.
FLSmidth vs. Epiroc
Both FLSmidth and Epiroc (Stockholm) use the copper signal and supply equipment to mining companies. FLSmidth focuses on fixed processing plant equipment (mills, flotation, tailings) while Epiroc focuses on mobile mining equipment (drill rigs, loaders, rock tools). FLSmidth's longer project cycles create a longer lag between the copper signal and earnings recovery — but also a longer duration of revenue recognition once orders are booked.
Key Risks
FLSmidth sold its cement division to focus on mining — increasing its cyclicality. The company's significant exposure to South American copper mines (Chile, Peru) creates geopolitical and labour strike risk. Competition from Metso Outotec (Helsinki) is intense across most product categories.
Cycle Performance Summary
| Parameter | Value |
|---|---|
| Exchange | Nasdaq Copenhagen |
| Buy date | January 2016 |
| Buy price | DKK 200 |
| Sell date | June 2018 |
| Sell price | DKK 440 |
| Return | +120% |
| Duration | 29 months |
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