BHP reports record copper production which now contributes 51% of earnings

BHP's shift to copper production over four years saw the metal make up more than 50% of its core earnings in the half year to December 31, 2023.

"BHP is the world's largest copper producer and with strong performance at Escondida mine (northern Chile), and solid contributions from our other operations in Chile and South Australia, we have increased FY26 group copper guidance to 1.9 – 2.0 MT," said CEO Mike Henry at the release of the group's interim results Tuesday.

The group produced over 2.0 MT in the 2025 financial year. It guidance compared with Rio Tinto forecasting its copper production at 650 000 tons to 710 000 tons for their 2026 financial year, while Glencore has guided copper production at 950 000 tons.

Copper has become a key growth driver for global mining groups as it is essential for electric vehicles, renewable energy systems and smart grids, while its conductivity also makes it irreplaceable in wiring, motors, and batteries.

"We have achieved 30% growth in copper production in the last four years, positioning us ahead of the strengthening copper market that we had anticipated. Copper contributed the largest share of our overall earnings for the first time, at 51% of underlying earnings before interest tax depreciation and amortisation (EBITDA)," said BHP CEO Mike Henry.

"This is allowing us to maximise increased earnings from the recent run up in copper prices as well as gold," he said.

He said the group was well positioned to capture the forecast higher long term copper prices with the group's four "compelling growth options" across Chile, Argentina, Arizona and South Australia.

First production and revenue from the Jansen Stage 1 potash project was anticipated in the middle of the 2027 calendar year. The recent completion of the cost estimate saw planned expenditure of $8.4 bn.

The Western Australia iron ore (WAIO) business achieved record first half production and shipments and a claimed position as the world's lowest cost major iron ore producer was strengthened.

"We continue to invest in this business. We are adding a sixth rail car dumper at Port Hedland so trains can unload faster, supporting an uplift in volumes to more than 305 Mt.," he said.

At group level, underlying EBITDA increased 25% to $15.5bn. Underlying attributable profit also increased by more than 20% to $6.2 bn.

Some $9.4bn was generated in operating cash and debt ended the first half at $14.7bn, around the midpoint of the $10bn to $20bn target range. A 13% increase in net operating cash flow was mainly due to higher copper and iron ore prices.

An interim dividend of US 73 cents (US 50 cents) per share was declared, equivalent to a 60% payout ratio.

A silver streaming agreement was also announced on Tuesday, for which the group would receive an upfront cash payment of $4.3bn. The group also expected to realise $2bn from the agreement reached with Global Infrastructure Partners linked to BHP's share of WAIO's power consumption.

Both transactions were expected to complete in the second half of the 2026 financial year and there was potential to unlock up to $10bn through active capital portfolio and asset management.

At Escondida, record concentrator throughput in the first half underpinned strong production, even as grade declined.

.In iron ore, WAIO saw record first half production and shipments, and record material mined.

Group gold production increased, with record refined gold output at Copper SA (up 33%), while group silver production increased 29%.

Looking ahead, Henry said they expected 3% global economic growth this year, China's economy was resilient and India continued to outperform.

"We are optimistic that the economic backdrop is supportive for our key commodities. Against a structurally higher cost environment, these conditions reinforce the importance of productivity and cost discipline and play to the strengths of BHP's low cost, diversified portfolio."

The significant increase in attributable profit was driven by good operations, cost controls with average higher prices. Copper and Iron ore were standout performers with underlying EBITDA margins of 66% and 62% respectively.

BUSINESS REPORT