BHP Group H1 Earnings Call Highlights

Key Points

• Copper dominance and strong operations: Just over half of BHP’s earnings now come from copper (up 30 percentage points in three years), with record copper and iron-ore output and a record $8 billion of copper EBITDA at a 66% margin; Escondida production guidance was raised.
• Robust financials and capital unlocking: Underlying EBITDA rose 25% and underlying attributable profit was $6.2 billion, the interim dividend was $0.73 per share (up 46% H/H) totaling $3.7 billion, and BHP expects to unlock >$6 billion from two deals (Antamina silver streaming $4.3B and a $2B Vale power arrangement) with up to ~$10 billion of capital potential for redeployment.
• Clear growth pipeline: BHP targets about 2.5Mt copper-equivalent p.a. by the mid-2030s and 3–4% CAGR to 2035, plans iron-ore volumes >305Mt by FY2028 (option to 330Mt), and expects Jansen stage one production mid-2027 with an updated cost of $8.4 billion and ~ $1 billion EBITDA per stage when ramped.

BHP Group NYSE: BHP reported what management described as “another good half” in its December 2025 half-year results, pointing to strong operational delivery, cost control and a favorable commodity price environment that supported balance sheet strength and higher cash returns.

Speaking alongside Chief Financial Officer Vandita Pant, Chief Executive Officer Mike Henry said the company’s strategy execution is increasingly evident in its earnings mix, with “just over half” of earnings for the period coming from copper. Henry said that represents an increase of 30 percentage points over the past three years, which he attributed to deliberate steps to expand and improve copper performance, including more reliable operations at Olympic Dam, grade and sequencing work at Escondida, and the OZ Minerals acquisition.

Operational performance and safety

Henry said BHP set operational records in copper and iron ore during the half, “and we did it safely.” He noted that key safety metrics improved, including a lower high potential injury frequency and improved hazard identification. He added that no fatalities occurred during the period.

At Escondida, Henry said BHP raised copper production guidance for this year and next, and remains on track to meet full-year guidance across the rest of the business. He also highlighted the role of the BHP Operating System (BOSS) in enabling teams to identify and act on improvement opportunities, and said it has helped the company meet production and unit cost guidance more reliably than competitors.

Pant provided asset-level detail, including:

• Escondida: Steady volumes despite 10% lower grade; improvements in throughput and recovery and higher byproduct prices contributed to a 16% improvement in costs.
• Copper South Australia: Copper production rose 2% and gold production increased 12%; Pant said strong gold output helped drive a more than 50% reduction in unit costs.
• Western Australia Iron Ore (WAIO): Record first-half production and shipments; Car Dumper Three rebuild completed on budget and ahead of schedule; C1 costs increased 1% to $17.66 per ton.
• Steelmaking coal (BMA): Volumes rose 2%, with open-cut strength offsetting geotechnical challenges at an underground mine; the business delivered its highest first-half stripping volumes in five years.
• New South Wales Energy Coal: Continued to perform well as the transition to closure progresses as planned.

Financial results and dividend

Pant said underlying EBITDA increased 25% and the EBITDA margin rose to 58%. Underlying attributable profit was $6.2 billion, and return on capital employed was 24%, both “up significantly over the past year.” She added that production increased 2% across the group while unit costs improved about 4.5%, despite inflation of more than 2% and currency pressures.

The company declared an interim dividend of $0.73 per share, which Henry said was up 46% half-on-half. Pant said the half-year dividend totaled $3.7 billion, representing a 60% payout ratio, and reflected the capital allocation framework and management’s confidence in outlook and cash flows.

In copper, Pant said BHP generated a record $8 billion of EBITDA during the half—more than half of the group total—at a 66% margin. She also emphasized the value of byproducts, noting BHP’s position as the world’s largest copper producer, a global top 20 gold producer and the world’s third-largest uranium producer, “at a time of near-record prices of these commodities.”

Capital allocation and value-unlocking agreements

Both executives emphasized disciplined capital allocation and efforts to unlock value from the existing asset base. Henry said BHP sees potential for up to $10 billion in capital that could be unlocked and reinvested into higher-return opportunities and/or increased shareholder returns.

Pant announced what she called the “most valuable ever” silver streaming agreement related to BHP’s share of Antamina’s future silver production. On completion, BHP expects to receive $4.3 billion in cash, while retaining full exposure to its share of Antamina’s future copper production.

She also referenced an earlier agreement announced in December related to BHP’s share of Vale’s inland power consumption. On completion, BHP expects to receive $2 billion in return for a tariff linked to power use over 25 years. Pant said the arrangement would not affect ownership of any assets and that BHP would retain full operational and strategic control of Vale.

Together, the two agreements are expected to unlock more than $6 billion of cash, with Pant reiterating that any redeployment would be assessed through the company’s capital allocation framework.

Market outlook and growth pipeline

Henry said commodity demand in 2025 was supported by more favorable trade outcomes than expected, supportive policy, and improved confidence. Despite ongoing policy and geopolitical uncertainty, he said BHP expects global GDP growth in 2026 to be broadly in line with last year. He cited expectations for China’s fifteenth five-year plan to lift household demand and prioritize technological development, continued momentum in India driven by infrastructure and manufacturing expansion, improved European growth through 2026, and a steady U.S. outlook.

On growth, Henry said BHP is advancing copper growth options and is targeting about 2.5 million tons of copper equivalent per year (including byproducts) by the mid-2030s. He also reiterated plans to deliver compound annual copper-equivalent production growth of 3%-4% through to 2035, underpinned by about 5% average annual growth in the copper business.

In iron ore, Henry said BHP has a pathway to grow volumes to over 305 million tons per year by the end of fiscal 2028, with an option to grow to 330 million tons per year if market conditions warrant. He also outlined a medium-term cost target of reducing costs by 10% to below $17.50 per ton.

On potash, Henry said a detailed review of cost and schedule estimates for Jansen stage one was completed in January. He said first production remains on track for mid-2027, but the company updated its cost estimate to $8.4 billion. Once ramped up, he said Jansen is expected to deliver about $1 billion of EBITDA per year per stage, with margins above 60%.

In copper, Henry described a “lower-risk pathway” that would represent around 40% production growth by 2035, largely through capital-efficient brownfield expansion. At Escondida, he said the company is progressing toward submitting an application for an environmental permit for a new concentrator within the next six months, with a final investment decision still on track for 2027 or 2028. He also said BHP raised fiscal 2027 guidance at Escondida to 1.0–1.1 million tons, and now expects to deliver more than 500,000 additional tons over the next five years compared to what was outlined at the 2024 Chile site visit—an outcome he said would equate to an additional $5 billion of EBITDA over that period “at today’s prices and margins.”

Henry also discussed progress at the Vicuña joint venture with Lundin Mining, noting the project applied for Argentina’s RIGI scheme, recent drilling that added 9 million tons of contained copper, and the potential for a stage one final investment decision as early as the end of the calendar year. He said that once fully developed across three stages, Vicuña could become a global top five copper and top five gold producing asset.

At Copper South Australia, Henry said the business is positioned for growth toward 650,000 tons of copper per year—“or close to 1,000,000 tons, including byproducts”—in the late 2030s, and that BHP expects to provide an update on growth plans later this year.

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.

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