BHP Group Limited reported a robust half-year to December 2025, with copper overtaking iron ore as the top earnings contributor and a detailed technical assessment released for its promising Vicuña copper-gold project.
- Revenue up 11% to US$27.9 billion, profit after tax up 28% to US$5.64 billion
- Copper accounts for 51% of Group EBITDA, highest ever share
- FY26 copper production guidance raised to 1.9–2.0 million tonnes
- Jansen Stage 1 potash project expenditure increased to US$8.4 billion, first production expected mid-2027
- Vicuña Joint Venture releases scoping-level technical assessment with large copper-gold resource but no Ore Reserves yet
Strong Half-Year Performance
BHP Group Limited has delivered a commanding set of results for the half year ended 31 December 2025, underscoring its operational excellence and strategic focus on copper growth. Revenue climbed 11% to US$27.9 billion, while profit after tax surged 28% to US$5.64 billion. Notably, copper contributed over half of the Group’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the first time, reflecting both record production and elevated prices.
The company’s copper production guidance for fiscal year 2026 has been raised to between 1.9 and 2.0 million tonnes, buoyed by strong performances at Escondida and other operations in Chile and South Australia. This milestone positions BHP well to capitalise on the anticipated long-term copper market strength driven by electrification and decarbonisation trends.
Iron Ore and Potash Progress
While copper took centre stage, BHP’s iron ore business in Western Australia continued to deliver record first-half production and shipments, maintaining its status as the world’s lowest cost major iron ore producer. The company is investing in infrastructure upgrades, including a sixth rail car dumper at Port Hedland, to support sustainable volume growth beyond 305 million tonnes per annum.
In potash, the Jansen Stage 1 project in Canada is 75% complete, with first production still expected by mid-2027 despite an increase in total project expenditure to US$8.4 billion. Stage 2 remains under review, highlighting ongoing capital allocation challenges in this growth segment.
Dividend and Financial Strength
Reflecting confidence in its outlook and disciplined capital management, BHP declared a fully franked interim dividend of 73 US cents per share, a 60% payout ratio. The company generated US$9.4 billion in operating cash flow and maintained net debt comfortably within its target range, supported by innovative streaming and power consumption agreements expected to unlock over US$6 billion in cash.
Samarco Dam Failure and Legal Matters
BHP continues to manage the financial and legal ramifications of the Samarco dam failure in Brazil, with a provision of US$5.3 billion as at 31 December 2025. The company has settled the Australian class action and faces ongoing group action claims in the UK and other jurisdictions, underscoring the complex legacy risks it must navigate.
Vicuña Joint Venture Technical Assessment
In a significant strategic update, BHP and Lundin Mining released a detailed technical assessment report for their 50, 50 Vicuña Joint Venture copper-gold project straddling the Argentina-Chile border. The report outlines a large-scale, long-life mineral resource combining the Josemaría and Filo del Sol deposits, with a conceptual staged development plan involving sulphide milling, oxide heap leaching, and sulphide expansion phases.
While no Ore Reserves have yet been declared and the project remains at an early scoping stage, the assessment highlights the potential for substantial copper and gold production, subject to further drilling, metallurgical optimisation, permitting, and stakeholder engagement. Key challenges include managing arsenic in sulphide concentrates through roasting and navigating the binational regulatory environment.
The project’s after-tax net present value at an 8% discount rate is estimated at US$9.5 billion with an internal rate of return of 14.8%, though these figures carry significant uncertainty given the reliance on a large proportion of Inferred Resources.
Outlook and Strategic Positioning
BHP’s HY26 results reinforce its position as a global mining leader with a diversified portfolio and a clear growth trajectory in copper and potash. The company’s disciplined capital allocation, operational improvements, and innovative financing arrangements provide a strong foundation to navigate market volatility and legacy liabilities.
Looking ahead, the successful advancement of the Vicuña project will be a key focus, alongside managing cost pressures and sustaining shareholder returns. The company’s ability to execute on its growth pipeline while mitigating environmental and social risks will be critical to maintaining its competitive edge in a structurally higher cost environment.
Bottom Line?
BHP’s record copper earnings and the promising yet early-stage Vicuña project set the stage for a transformative growth phase, but execution risks and legacy liabilities warrant close investor attention.
Questions in the middle?
- How will BHP manage the elevated capital costs and schedule risks at Jansen Stage 1 and Stage 2?
- What are the next steps and timelines for advancing Vicuña from scoping to feasibility and Ore Reserve declaration?
- How might ongoing legal developments related to the Samarco dam failure impact BHP’s financial position and reputation?