Australia’s mining stocks are poised to extend their rally as surging copper demand for power infrastructure and artificial intelligence gives investors a new reason to buy the sector. The S&P/ASX 200 Index’s best-performing sub-gauge is shifting beyond long-dominant iron ore as miners turn to copper for growth. At BHP Group Ltd., copper recently accounted for more than half of full-year revenue for the first time as prices hit a record, while earnings growth remained negative at iron ore-heavy Fortescue Ltd.

That shift is set to accelerate as AI data centers, electrification and expanding power grids drive copper demand, while China’s property slowdown weighs on iron ore. “The cut and thrust of it is that copper demand is growing while iron ore isn’t, and the market is rewarding that,” said David Tuckwell, chief investment officer at ET F Shares in Sydney. Looking at the latest earnings from Australia’s largest miners, “the pivot to copper is well and truly under way.”

BHP is not alone in seeking a bigger share of the world’s copper, with peers including Rio Tinto Group pursuing similar strategies. BHP’s push to increase its copper exposure was behind its attempted takeover of Anglo American Plc, which collapsed last year. Still, investors seeking pure copper exposure may have relatively few options in Australia, according to some analysts. “If you want size, quality and scale, the ASX is not where you need to be when it comes to copper,” said Dylan Kelly, head of research at Terra Capital Holdings.

Growing copper exposure offers investors another way to tap the AI boom driving global stocks to records, while providing scope for further gains in Australian miners. “There is a structural deficit in the copper industry as a whole,” said Jessica Leung, a portfolio manager at Global X Management. Combined with the growing appetite for the metal with the AI build-out, Australia’s mining sector is now pivoting to “where they see the next leg of growth.”