BHP Group posted earnings at the upper end of analyst expectations, as a years-long effort to shore up copper production combined with a historic metals rally to offset a lackluster period for its giant iron ore business.<\/p>\n
Copper, a metal favoured for its vital role in a more electrified world, accounted for more than half of the group\u2019s profit for the first time \u2014 a significant win for Chief Executive Officer Mike Henry, who has sought to diversify the world\u2019s largest miner away from operations focused on serving China\u2019s steel mills. Acquisitions began to bear fruit, as did the improvements at Escondida, the world\u2019s largest mine \u2014 all helped by a record surge in prices.<\/p>\n
\u201cThis is the result of our deliberate actions to grow our copper business,\u201d Henry said in a meeting with analysts. \u201cNow, BHP is, by design, a diversified miner \u2013 rather than focused on a single commodity.\u201d<\/p>\n
The combination pushed BHP\u2019s underlying attributable profit 22% higher to $6.2 billion for the six months to the end of December. Shares climbed as much as 7.6% in Sydney to a record, their biggest gain in more than 10 months.<\/p>\n
\u201cIn the last five years, Mike has set the business up with options,\u201d said Glyn Lawcock, head of metals and mining research at Barrenjoey Markets Pty in Sydney. \u201cClearly, growth to 2030 is really potash and iron ore, but you hit the start of the new decade, it\u2019s pretty much all copper.\u201d<\/p>\n
The copper division saw underlying earnings before interest, tax, depreciation, and amortisation climb 59% to $8 billion, thanks to steady output and prices that climbed by almost a third over the period.<\/p>\n
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Earnings from its iron ore business, which still accounts for almost half of the group\u2019s total, edged 4% higher, as \u201ctough\u201d negotiations with China\u2019s state-owned iron ore buyer continue. Henry said the company\u2019s wider relationship with steel mills was \u201cdeep and strategic\u201d and added the miner was confident a resolution would be reached with China Mineral Resources Group Co.<\/p>\n
\u201cWe are working constructively with CMRG to find a solution acceptable to both sides,\u201d Henry said.<\/p>\n
BHP\u2019s Jansen potash project in Canada, another vital leg of Henry\u2019s diversification plan, remains on track for first production in the middle of next year. The miner announced last month that the operation had again blown past cost estimates, with investment in the first phase now seen at $8.4 billion.<\/p>\n
Along with peers, BHP has returned to the M&A fray over the past few years as the sector pushes for growth, particularly in copper. But despite some wins \u2014 including the 2023 purchase of miner OZ Minerals, and the Vicuna joint venture with Lundin Mining, focused on projects along the Chile-Argentina border \u2014 large-scale success has proved elusive.<\/p>\n
The company\u2019s approaches for rival Anglo American Plc \u2014 most recently an effort to gatecrash the miner\u2019s tie-up with Teck Resources \u2014 have been repeatedly thwarted.<\/p>\n
\u201cIf there was an opportunity that we thought we could create material value for BHP shareholders through acquiring other assets, we would be willing to have a go at it \u2014 but that\u2019s such a small opportunity set,\u201d Henry told reporters.<\/p>\n
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\u201cHence the real focus is on running our existing business ever better and unlocking organic growth that we have in the portfolio.\u201d<\/p>\n
The company has instead highlighted a plan to raise as much as $10 billion of capital with asset sales and other deals to unlock capital, investing the cash in priority areas or returning it to shareholders.<\/p>\n
On Tuesday, BHP announced a $4.3 billion long-term silver streaming agreement with Wheaton Precious Metals, just two months after selling a $2 billion stake in the power network that supplies its vast iron ore operations in the Pilbara region of Western Australia.<\/p>\n
The silver deal, an effort to benefit from near-record prices, relates to metal produced as a by-product at the Antamina copper mine in Peru, in which the Australian miner has a 33.75% share.<\/p>\n
\u201cOver his term, Henry bought Oz Minerals, built out the company\u2019s copper footprint in Australia, sold off petroleum, collapsed the dual-listed company structure and did the Vicuna joint venture,\u201d Barrenjoey\u2019s Lawcock said. \u201cWhen he does step down, and he\u2019s just come to his sixth year today, he\u2019s created a different BHP to what it was before.\u201d<\/p>\n
BHP said it would pay an interim dividend of 73 cents, equivalent to a 60% payout ratio.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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