BHP Group (NYSE:BHP) reported higher earnings, record copper and Western Australia Iron Ore production, and a full-year dividend of $8.7 billion for fiscal 2026, as the miner said it plans to accelerate operational improvements and pursue growth in copper, potash and other core commodities.
Chief Executive Officer Brandon Craig said the company entered the year from a position of strength, citing its Tier 1 asset base, operating system and balance sheet. He said BHP’s agenda is to improve safety, productivity and growth while maintaining capital-allocation discipline.
Financial Results and Dividend
Chief Financial Officer Vandita Pant said underlying EBITDA rose 27% to $33 billion for the fiscal year, producing a margin of nearly 60%. Underlying attributable profit increased 30% to $13 billion, while return on capital employed reached 26%.
Total attributable profit, including exceptional items, increased 9% to nearly $10 billion. Results included a $2.3 billion non-cash impairment related to Jansen. Net debt fell below $9 billion, Pant said.
The board determined a final dividend of $5 billion, or $0.99 per share for the June half, bringing the full-year dividend to $8.7 billion, the company’s highest in four years. BHP said proceeds from its Antamina silver streaming agreement also supported the payout.
- Copper prices were up 35% during the year, while iron ore prices increased 3%, according to BHP.
- Group unit costs improved by more than 6%, despite currency pressures, inflation and higher diesel and asset prices.
- BHP said it received nearly $1 billion in cash from previously announced non-core asset sales during the year.
Copper Becomes the Largest Earnings Contributor
BHP produced approximately 2 million tons of copper for a second consecutive year and said copper accounted for more than half of annual EBITDA for the first time. The copper business generated a record $18 billion in EBITDA, representing 54% of group EBITDA, with a 70% margin.
At Escondida, unit costs improved 10%, while Copper South Australia’s unit costs declined by more than 70%, supported by by-product revenue. BHP said Escondida delivered records for material mined and concentrator throughput, helping offset the effect of ore grades.
The company approved about $500 million in pre-commitment funding for a new concentrator at Escondida. Craig said BHP expects to make a final investment decision on that project in 2027 or 2028. The optimized project scope is expected to provide higher throughput, production and returns, he said.
BHP also said its lower-risk copper growth pathway could lift attributable copper-equivalent production by roughly 50% by the mid-2030s, to about 2.5 million tons annually. This includes more than 500,000 tons of copper-equivalent by-products.
At the Vicuña joint venture with Lundin Mining, the company received environmental approval for Stage 1 and approval under Argentina’s RIGI investment framework during the half. Vicuña also signed a royalty agreement with Argentina’s San Juan province. Craig said a Stage 1 final investment decision could come as early as the end of the calendar year.
Operational Improvement and Growth Investment
Craig said BHP’s Operating System, or BOS, remains central to its efforts to improve safety and productivity. The company’s Operational Excellence Index score increased to 52 from 36 in 2020, and BHP said it has undertaken roughly 7,000 initiatives across the business over that period. In their first year of implementation, those initiatives generated more than $5 billion in cost savings, according to the company.
BHP aims to raise its companywide Operational Excellence Index score to 65, which Craig said would exceed external world-leading benchmarks. Technology initiatives were delivering incremental EBITDA at an annual run rate of almost $500 million by the end of fiscal 2026, and BHP is targeting more than $650 million by the end of fiscal 2027.
Western Australia Iron Ore achieved record production and shipments, while C1 unit costs rose only 1%, BHP said. Pant said WAIO remained the world’s lowest-cost major iron ore producer for a seventh consecutive year and had reduced costs in real terms after the COVID-19 period.
In steelmaking coal, BMA production increased 10% over two years, according to the company. Craig said BHP does not plan to sell the business and sees an opportunity to improve production and costs through supply-chain and productivity initiatives.
Capital Spending, Potash and Cash Flow Outlook
BHP expects capital expenditures to average about $11 billion annually over the medium term, measured in nominal terms at constant foreign-exchange rates. More than half of growth spending is expected to go toward copper, rising to about two-thirds when non-operated joint ventures are included.
Pant said BHP expects its copper capital program to be self-funding at consensus prices. At spot prices, the company expects to generate approximately $50 billion in attributable free cash flow over the next five years after funding growth investments. Under a sustained multiyear downside commodity-price scenario, BHP expects about $15 billion in free cash flow over the same period.
Jansen Stage 1 remains on track for first production in the middle of the next calendar year, Craig said. Once ramped up, each stage is expected to generate about $1 billion of EBITDA annually with margins above 60%. BHP said potash would add a differentiated earnings stream to its portfolio because its demand drivers and customer markets differ from those of its other commodities.
Looking ahead, BHP estimated its portfolio could deliver 3% to 4% annual growth from 2027 through 2035, including approximately 5% annual growth in copper. Craig said the company’s priorities are to improve operational performance, execute projects on time and on budget, and build future growth options through partnerships, exploration and early-stage investments.
About BHP Group (NYSE:BHP)
BHP Group is an Anglo-Australian natural resources company engaged principally in the exploration, development, production and marketing of commodities. Its core businesses include the extraction and processing of iron ore, copper, metallurgical and thermal coal, nickel and other minerals. BHP operates large-scale mining and processing assets and supplies raw materials used across steelmaking, energy and industrial supply chains.
The company has a global operating footprint with significant assets and projects in Australia and the Americas, and commercial activities that serve customers worldwide.
