BHP has reported record copper and iron ore production for FY25, while revising upward the capital cost and timeline for its Jansen Stage 1 potash project. The miner’s operational strength contrasts with ongoing challenges in nickel and coal segments.
- Record copper production surpasses 2 million tonnes, led by Escondida and South Flank
- Iron ore output hits 263 million tonnes despite severe weather disruptions
- Jansen Stage 1 potash project cost estimate rises to US$7.0–7.4 billion with production delayed to mid-2027
- Western Australia Nickel operations remain suspended, with divestment under review
- Decarbonisation initiatives advance, including ammonia dual-fuel vessels and logistics partnerships
Record Production Highlights Operational Resilience
BHP’s operational review for the year ended 30 June 2025 reveals a company firing on all cylinders in key commodities. The miner achieved record copper production exceeding 2 million tonnes, an 8% increase on the prior year and a 28% jump since FY22. This milestone was driven by stellar performances at flagship assets such as Escondida in Chile, which posted its highest output in 17 years, and South Flank in Western Australia, which exceeded its nameplate capacity in its first full year.
Iron ore production also reached a new peak of 263 million tonnes, overcoming the impacts of Tropical Cyclone Zelia and Tropical Storm Sean. Western Australia Iron Ore (WAIO) operations contributed significantly, delivering record shipments and benefiting from infrastructure upgrades including rail and port enhancements.
Jansen Potash Project Faces Cost and Timing Revisions
While operational performance was strong, BHP updated its outlook on the Jansen Stage 1 potash project in Canada. The capital expenditure estimate has increased from the original US$5.7 billion to a range of US$7.0 to US$7.4 billion, reflecting inflationary pressures, design changes, and productivity challenges. First production is now expected to revert to the original mid-2027 timeline, after a prior delay.
Stage 1 is 68% complete, and the company is also reviewing the timing of Stage 2, potentially extending first production to FY31 amid evolving market supply considerations. Despite these adjustments, BHP maintains its group capital expenditure guidance at approximately US$11 billion for both FY26 and FY27.
Mixed Fortunes in Coal and Nickel Segments
Steelmaking coal production increased by 5%, aided by improved truck productivity that offset adverse weather and geotechnical issues at Broadmeadow. However, energy coal production declined slightly by 2%, with wet weather impacting truck availability. Notably, Western Australia Nickel operations entered temporary suspension in December 2024, with a divestment under active consideration. BHP is committed to a people-first approach during this review and continues exploration to preserve future options.
Sustainability and Decarbonisation Efforts Gain Momentum
BHP is advancing its sustainability agenda with contracts for ammonia dual-fuelled bulk carriers that could reduce greenhouse gas emissions by up to 95% per voyage. Partnerships such as the one with Aurizon in South Australia aim to cut emissions in logistics, while commercial-scale trials with China Baowu explore decarbonised steelmaking pathways using BHP’s Pilbara iron ores. These initiatives underscore BHP’s commitment to reducing its environmental footprint amid growing global pressure.
Financial and Market Outlook
Commodity demand remains resilient, supported by China’s export growth and domestic stimulus, alongside accelerating investments in renewable energy and electrification. BHP expects to meet its FY25 unit cost guidance across major assets and projects copper production guidance for FY26 between 1.8 and 2.0 million tonnes. The company continues to manage financial impacts related to the Samarco dam failure, with net debt around US$13 billion as of June 2025.
Bottom Line?
BHP’s record production and strategic project updates position it well for growth, but rising costs and market uncertainties warrant close investor attention.
Questions in the middle?
- How will BHP manage the increased capital costs and schedule risks at Jansen Stage 1?
- What are the implications of the Western Australia Nickel suspension and potential divestment on BHP’s portfolio?
- Can BHP sustain its production growth amid evolving commodity demand and geopolitical headwinds?