BHP has reported robust copper and iron ore production for the nine months to March 2026, with key projects progressing and a leadership change set for July. Operational resilience and disciplined capital moves underpin its outlook.
- Copper production expected in upper half of FY26 guidance
- Record output at Escondida and WAIO iron ore operations
- Spence production lowered due to ore complexity challenges
- US$4.8 billion raised from divestments and silver streaming deal
- Brandon Craig to succeed Mike Henry as CEO from July 2026
Copper Production Holds Firm Despite Spence Challenges
BHP Group Limited (ASX:BHP) has delivered a strong operational showing in the nine months to 31 March 2026, with copper production forecast to land in the upper half of its FY26 guidance range of 1.9 to 2.0 million tonnes. This is largely driven by record throughput and material mined at Escondida in Chile, alongside a significant production uplift at Antamina in Peru, which saw copper output increase 19% year-to-date.
However, the Pampa Norte operation, including Spence, faced headwinds from ore variability and declining grades, forcing a downward revision of its FY26 copper production guidance to 210-220kt from 230-250kt. BHP plans to invest in upgraded flotation cells at Spence to address these processing challenges, with a final investment decision anticipated in the first half of FY27.
Escondida’s operational excellence is underscored by record material mined and concentrator throughput, despite a planned dip in feed grade. The company also lowered Escondida’s unit cost guidance to US$1.00–1.20 per pound of copper, reflecting improved by-product credits and operational gains. The submission of the Environmental Impact Declaration for Escondida’s New Concentrator marks a pivotal step in its growth program, aiming to add 220-260ktpa of copper capacity with an expected final investment decision by 2027-28 and first production targeted for 2031-32.
Iron Ore and Coal Operations Maintain Momentum
Western Australia Iron Ore (WAIO) achieved record production of 191 million wet metric tonnes, a 1% increase year-to-date, bolstered by record material mined and improved rail network efficiency following infrastructure upgrades. Samarco in Brazil also exceeded expectations, with production up 37% and guidance now pegged at the top end of its 7-7.5 million tonnes range.
Coal production held steady amid weather disruptions, with steelmaking coal from BHP Mitsubishi Alliance (BMA) showing a modest 1% increase and energy coal from NSW Energy Coal up 11%. Despite heavy rainfall impacting some operations, BHP expects FY26 production to remain within previously guided ranges.
Capital Discipline and Asset Portfolio Optimization
BHP has bolstered its balance sheet through strategic divestments and financing deals. The recent silver streaming transaction with Wheaton Precious Metals generated US$4.3 billion upfront, while the Carajás asset sale closed with US$240 million received and potential contingent payments of up to US$225 million. These moves follow earlier divestments of Blackwater and Daunia, collectively raising around US$4.8 billion in the past month.
On the growth front, Resolution Copper in Arizona, a joint venture where BHP holds 45%, advanced a key land exchange enabling further drilling and mine design work at one of the world’s largest high-grade copper deposits. Meanwhile, the Jansen Stage 1 potash project in Canada is 78% complete, with Stage 2 under review, reflecting BHP’s focus on long-life, high-quality resource development.
Leadership Change Signals New Chapter
Brandon Craig will take the helm as BHP’s CEO from 1 July 2026, succeeding Mike Henry after six and a half years. Craig brings over 25 years of experience within BHP, most recently as President Americas, where he oversaw the company’s rise to the world’s largest copper producer and spearheaded growth initiatives in copper and potash. This leadership transition arrives as BHP navigates an evolving operating environment marked by commodity price volatility and geopolitical tensions impacting energy and consumables costs.
The timing of the CEO succession dovetails with the company’s recent dividend announcements, including a fully franked USD 0.73 per share payout with multi-currency options, reflecting BHP’s commitment to returning value to shareholders while maintaining operational strength.
With a robust pipeline of copper and potash projects, alongside a disciplined capital management approach, BHP positions itself to weather near-term challenges while pursuing long-term value creation.
Bottom Line?
BHP’s operational resilience and strategic asset moves set a solid foundation for Brandon Craig’s leadership amid ongoing commodity market uncertainties.
Questions in the middle?
- How will BHP manage Spence’s ore complexity challenges and their impact on future production?
- What regulatory hurdles remain for the Escondida New Concentrator and Resolution Copper projects?
- How might Brandon Craig’s leadership influence BHP’s capital allocation and growth priorities?