Jansen Cost Escalation and Samarco Litigation Cloud BHP’s Strong FY2025 Results
BHP Group Limited reported strong FY2025 financial results driven by record copper production and operational excellence, while advancing key growth projects and sustainability goals. The company maintained its dividend payout and navigated cost escalations at the Jansen potash project alongside ongoing Samarco dam failure remediation.
- Record copper production surpassing 2 million tonnes
- Revenue of US$51.3 billion and profit after tax of US$9.0 billion
- Dividend payout maintained at 110 US cents per share (55% payout ratio)
- Jansen potash Stage 1 cost revised upward to US$7.0–7.4 billion
- Operational GHG emissions reduced 36% from FY2020 baseline
- Samarco dam failure settlement ratified with ongoing remediation and legal proceedings
- Achievement of gender balance and record Indigenous procurement spend
Strong Financial and Operational Performance
BHP Group Limited delivered a robust set of financial results for the fiscal year ended 30 June 2025, reporting revenue of US$51.3 billion and a profit after tax attributable to shareholders of US$9.0 billion. This performance reflects the company’s operational excellence, particularly in copper production, which reached a record 2.02 million tonnes, an 8% increase year-on-year. Iron ore production also set a new record, with 263 million tonnes produced, while steelmaking coal volumes rose despite challenging weather conditions.
The company’s disciplined capital allocation and cost management underpinned these results, with unit costs at major assets declining by 4.7% year-on-year. BHP’s underlying EBITDA stood at US$26.0 billion, maintaining a strong margin of 53%. Net operating cash flow was US$18.7 billion, supporting a dividend payout of 110 US cents per share, consistent with a 55% payout ratio, reflecting the company’s commitment to delivering shareholder returns.
Growth Projects and Portfolio Positioning
BHP continues to invest in its growth pipeline, with capital and exploration expenditure totaling US$9.8 billion in FY2025. The Jansen potash project in Canada, a world-class asset expected to contribute to food security and sustainable land use, is 68% complete for Stage 1. However, the company revised the estimated capital expenditure for Jansen Stage 1 upward from US$5.7 billion to a range of US$7.0 to US$7.4 billion, driven by inflation, design changes, and productivity challenges. First production timing may revert to the original mid-2027 schedule, with further updates expected in FY2026.
Stage 2 of Jansen is 11% complete, with first production now expected in FY2031, two years later than initially planned. BHP is actively managing project sequencing and capital efficiency to optimize returns. The company’s copper growth strategy is also advancing, highlighted by the formation of the Vicuña joint venture with Lundin Mining, which holds the Josemaria and Filo del Sol copper deposits on the Argentina-Chile border, positioning BHP for long-term growth in future-facing commodities.
Sustainability and Social Value Milestones
BHP achieved significant sustainability milestones in FY2025, including a 36% reduction in operational greenhouse gas emissions (Scopes 1 and 2) from FY2020 levels, keeping the company on track to meet its FY2030 target. The company also advanced its climate adaptation and nature-positive initiatives, increasing the area under conservation and restoration management by over 14,500 hectares.
Socially, BHP reached its aspirational goal of gender balance within its global employee workforce, with women representing 41.3% of employees, a remarkable increase from 17.6% in 2016. Indigenous procurement spend hit a record US$853 million, up 40% year-on-year, reflecting strengthened partnerships and economic inclusion efforts in Australia, Canada, and Chile.
Ongoing Legal and Risk Management
The company continues to manage the legacy of the Samarco dam failure in Brazil, with the settlement agreement ratified by the Brazilian Supreme Court in November 2024. The agreement, valued at approximately US$31.7 billion, includes remediation, compensation, and community development programs. While this settlement resolves many claims, ongoing litigation and regulatory inquiries persist, including class actions in Australia and the UK, with uncertain outcomes.
BHP maintains a strong balance sheet with net debt of US$12.9 billion and a gearing ratio of 19.8%, supported by recent bond issuances and credit facilities. The company’s risk management framework addresses operational, market, climate, and cybersecurity risks, with continuous monitoring and governance oversight.
Governance and Leadership
In FY2025, BHP underwent a leadership transition with Ross McEwan appointed Chair of the Board, succeeding Ken MacKenzie. The Board remains committed to strong governance, diversity, and transparency, with a gender-balanced composition and ongoing director evaluations. The company’s remuneration framework aligns executive incentives with safety, sustainability, financial performance, and shareholder value creation.
Looking ahead, BHP is focused on delivering value through operational excellence, disciplined capital allocation, and advancing its portfolio in commodities critical to the global energy transition and sustainable development.
Bottom Line?
BHP’s FY2025 results underscore resilience and growth, but watch for Jansen’s cost trajectory and Samarco’s legal uncertainties.
Questions in the middle?
- How will BHP manage the financial and operational impacts of the Jansen potash project’s cost and schedule revisions?
- What are the potential outcomes and financial implications of ongoing Samarco dam failure litigation and claims?
- How will delays in diesel displacement technology adoption affect BHP’s long-term decarbonisation and operational efficiency?
