BHP profit jumps 30% as copper overtakes iron ore

BHP Group ↘ 1.62% reported a 30% surge in full-year underlying profit to $13.20 billion, beating analyst estimates and declaring its highest annual dividend in four years, as record copper prices cemented the red metal's dominance over iron ore as the mining giant's top earnings driver.

The world's largest miner by market capitalization disclosed the results on Tuesday for the fiscal year ending June 30, with copper division earnings of $18.19 billion surpassing iron ore's $14.53 billion for the first time in the company's history. Copper accounted for more than 50% of EBITDA, a milestone underscored by Chief Financial Officer Vandita Pant during the earnings call.reuters+1

The company announced a final dividend of 99 cents per share, bringing the full-year payout to $1.72 per share — its highest in four years — equivalent to a 72% payout ratio. Net debt fell to $8.69 billion, well below BHP's own target range of $10 billion to $12 billion and the Visible Alpha consensus estimate of $9.10 billion.bloomberg+1

Copper's Ascendancy

Copper prices have climbed to record highs above $14,000 a tonne this year, driven by surging demand from energy-hungry AI data center construction and the global shift toward cleaner power. The price rally has intensified competition among miners to secure high-grade copper assets.reuters

CEO Brandon Craig, who took the role approximately 50 days ago, outlined plans to grow BHP's attributable copper production from 1.4 million tonnes to 2 million tonnes by 2035, a roughly 40% increase. Growth projects include an expansion at Escondida in Chile, the Vicuña copper-gold venture with Lundin Mining ↗ 0.50% in Argentina, a smelter expansion in South Australia, and the longer-dated Resolution project in Arizona.finance.yahoo+1

Iron Ore and Broader Outlook

BHP's flagship Western Australia Iron Ore operations generated $14.67 billion in operating earnings, up 2% from the prior year and in line with consensus estimates. The company said it could unlock up to $3.5 billion in additional value from those assets through portfolio management, with Global Infrastructure Partners recently investing $2 billion in the inland power network for a minority stake.reuters

Net profit for the year rose 9% to $9.83 billion, though results were weighed down by a previously disclosed $2.3 billion impairment related to a potash initiative in Canada. BHP's Jansen potash project is expected to begin production next year, with the company forecasting global potash demand will grow from 75 million tonnes to more than 100 million tonnes by 2050.wsj+1

Craig also addressed a fatality at BMA's Peak Downs mine in Queensland, calling the incident tragic and reaffirming that becoming a fatality-free operation remains BHP's first priority.finance.yahoo