Prime Highlights:
- BHP Group reported a 22% rise in half-year underlying profit to $6.20 billion, exceeding market expectations and sending shares to a record high.
- Copper became BHP’s top earnings source for the first time, overtaking iron ore amid strong price gains driven by AI and clean energy demand.
Key Facts:
- Copper generated $7.95 billion in operating earnings, accounting for 51% of total underlying operating earnings of $15.46 billion, compared with iron ore’s $7.50 billion.
- The company announced an $18 billion investment in Argentina through its Vicuna joint venture with Lundin Mining and signed a $4.3 billion silver streaming deal with Wheaton Precious Metals.
Background:
BHP Group reported a 22% rise in half-year underlying profit, driven by strong copper prices that helped the metal overtake iron ore as the company’s top earnings source for the first time.
The world’s largest listed miner posted an underlying attributable profit of $6.20 billion for the six months ended December 31, beating market expectations of $6.03 billion. Investors welcomed the results, pushing BHP shares up 7% to a record high. The company declared an interim dividend of 73 cents per share, above forecasts of 63 cents.
Copper, including gold byproducts, generated $7.95 billion in operating earnings, higher than iron ore’s $7.50 billion. Copper made up 51% of the company’s total operating earnings of $15.46 billion. Higher copper prices, up 32%, boosted the strong results. Demand grew due to artificial intelligence data centers and the global shift toward cleaner energy.
Iron ore production hit a record in the first half, but prices have weakened amid growing supply. Iron ore prices recently touched a seven-month low. Unit costs for iron ore rose 7% to $19.41 per metric ton, adding pressure on margins.
Chief Executive Mike Henry said the company remains focused on organic growth rather than large acquisitions. Last year, BHP stepped away from a takeover approach for Anglo American. Meanwhile, rival Rio Tinto recently ended talks to buy Glencore over valuation differences.
BHP plans to expand copper production further. In January, it raised the lower end of its annual copper output forecast to between 1.9 million and 2 million tons. The company also announced an $18 billion multi-year investment in Argentina through its Vicuna joint venture with Lundin Mining, aiming for peak production of over 500,000 tons annually next decade.
Separately, BHP signed a $4.3 billion silver streaming deal with Wheaton Precious Metals as part of a broader $10 billion asset monetization plan to support future dividends.