BHP cashes in on ‘metal of the future’

Worldwide demand for electrification, renewable energy, and the digital infrastructure needed to power AI has made copper, often labelled the “metal of the future”, the biggest earner at global mining giant BHP.

The world’s biggest miner hit a new milestone in the half-year to December after a four-year drive to boost copper production saw the red metal comprise the largest share of BHP’s underlying earnings, previously dominated by the miner’s output of iron ore from its huge Pilbara operations in Western Australia.

BHP is one of the world’s largest iron ore and copper producers.

The earnings stream from both commodities has boosted its half-year profit to December 2025 by 28 per cent to $US5.64 billion ($8 billion) as its revenue rose 11 per cent to $US27.9 billion.

BHP shares rose 6.7 per cent during morning trade to $53.71. The company said it will pay investors an interim dividend of US73¢, fully franked on March 26.

The resources giant’s copper output was significantly higher, but it also reported record first-half production from its iron ore operation, a key ingredient for steelmakers in China and elsewhere that makes it Australia’s largest and most valuable export by a wide margin. BHP said it wants to lift its iron ore output to around 305 million tonnes a year.

“We have achieved around 30 per cent growth in copper production in the last four years, positioning us ahead of the strengthening copper market that we had anticipated,” chief executive Mike Henry said. “This is allowing us to maximise increased earnings from the recent run-up in copper prices as well as gold,” he said.

Off the back of strong production at its Escondida mine in Chile, and other mines including its operations in South Australia, the company increased its copper guidance to between 1.9 and 2 megatonnes.

BHP and other Australian miners are reaping the benefits of rising global commodity prices. Copper has jumped about 55 per cent over the past two years and soaring values for gold, silver and uranium – metals often found in mines alongside copper – also boosted BHP’s bottom line, delivering a $US2.1 billion jump in revenue, up 46 per cent on the previous corresponding period.

Henry said he expects global economic growth will hit around 3 per cent this year.

China’s economy is resilient, meeting its 5 per cent growth target last year, and India continues to outperform, he said. “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.”

But the company is still facing tough, and as yet unresolved, negotiations with China’s largest state-owned iron ore buyer, China Mineral Resources Group, over the future price to be paid for its ore.

When asked if BHP was taking a financial hit because of the protracted negotiations, Henry pointed to the half-year results: “We remain on track to meet guidance, production-wise. And it was a super-strong half for WAIO [West Australian Iron Ore] on the production front. And in addition to that, we’ve performed better than others when it comes to price realisations for the half as well.”

Negotiations can get “tough from time to time”, he said: “I’m confident that at the end of the day, there’s a path through this, given the respect that we have for each other, to a resolution that is acceptable to both parties. But that takes time.”

Asked if BHP had any merger aspirations after Rio Tinto and Glencore earlier this month abandoned talks on a $300 billion merger, Henry said: “We are now the largest, we’ve grown by 30 per cent and we’ve got multiple large growth options already in the portfolio. We don’t feel the need to [merge].

“But for the discrete few opportunities that might come along that fit the very strict criteria that we have, we’ve got the wherewithal to pursue them, but we’re not feeling any burning need to,” he added.

BHP announced on Tuesday it has reached a $US4.3 billion long-term streaming agreement with Wheaton Precious Metals International to take its share of the silver produced at the Antamina mine in Peru, a joint venture it owns along with Glencore and Teck Resources.

The deal will allow BHP to realise the value of Antamina’s silver as a byproduct, and it will retain all the copper, zinc and lead production from its share of mine.

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