BHP has reported a robust operational half-year, setting new production records and raising its copper output forecast for FY26 amid strong commodity prices.
- Record copper and iron ore production at key assets
- FY26 copper production guidance increased to 1.9–2.0 million tonnes
- US$2 billion infrastructure deal for WAIO power network announced
- Jansen potash project on track for mid-2027 production start
- Ongoing decarbonisation efforts with battery-electric haul truck trials
Strong Operational Momentum
BHP has delivered a strong operational performance for the half year ended 31 December 2025, capitalising on a favourable commodity price environment. The company set new records at its copper and iron ore operations, with copper prices rising 32% year on year and iron ore prices up 4%. This robust backdrop has enabled BHP to increase its FY26 copper production guidance, reflecting improved delivery across key assets.
At the heart of this growth is the Escondida mine in Chile, BHP's flagship copper operation, which achieved record concentrator throughput. Production guidance for Escondida has been lifted to between 1.2 and 1.275 million tonnes for FY26, with expectations that FY27 output will surpass medium-term targets. Antamina in Peru also raised its copper production forecast, while other copper assets like Spence and Copper South Australia remain on track, with Copper SA notably achieving record refined gold output.
Iron Ore and Coal Highlights
Iron ore production was equally impressive, with Western Australia Iron Ore (WAIO) hitting record first-half production and shipments, positioning the company well ahead of the typically challenging wet season. Samarco in Brazil saw a 48% production increase, driven by operational improvements following the restart of its second concentrator. BHP also announced a landmark US$2 billion infrastructure transaction with Global Infrastructure Partners involving WAIO’s inland power network, a deal that will bolster balance sheet flexibility while maintaining operational control.
Coal production showed mixed but positive trends. Steelmaking coal production increased, supported by a five-year high stripping performance at BHP Mitsubishi Alliance (BMA), despite some geotechnical challenges. Energy coal production rose 10%, benefiting from favourable mining conditions and record wash plant throughput at NSW Energy Coal (NSWEC).
Growth Projects and Sustainability Initiatives
BHP’s growth pipeline remains focused on copper, with the Vicuña project in Argentina progressing through regulatory milestones and the Escondida New Concentrator permit on track for submission in the second half of FY26. Meanwhile, the Jansen potash project in Canada is advancing steadily, with production expected to commence by mid-2027. This project represents a strategic diversification into a future-facing commodity with long-term value potential.
On the sustainability front, BHP is advancing decarbonisation efforts in the Pilbara region, including trials of battery-electric haul trucks at the Jimblebar iron ore mine and battery-electric heavy haulage locomotives on the WAIO rail network. These initiatives underscore BHP’s commitment to reducing its carbon footprint while enhancing operational efficiency.
Financial and Market Context
Preliminary financial impacts include expected EBITDA and taxation expenses aligned with operational performance and commodity prices. Net debt is forecast between US$14 and US$15 billion. The Samarco dam failure continues to have financial implications, with ongoing costs factored into the company’s outlook. Globally, commodity demand remains resilient, supported by China’s targeted policies and India’s emerging role as a key demand driver, providing a positive backdrop for BHP’s commodity portfolio.
Bottom Line?
BHP’s upgraded copper guidance and strategic infrastructure deal position it well for sustained growth amid evolving market dynamics.
Questions in the middle?
- How will BHP’s infrastructure deal impact its long-term capital structure and flexibility?
- What are the risks and timelines associated with the Escondida New Concentrator permit submission?
- How might ongoing geotechnical challenges at BMA affect coal production and costs in FY27?