BHP iron ore fires up iron ore, lifts copper targets as potash push blows the budget again

BHP’s Pilbara iron ore machine has racked up a half-year record and copper targets have been set even higher, but ambitions to push into a new commodity in Canada have blown the budget again.

Quarterly iron ore production of 69.7 million tonnes was up 5 per cent on the same time last year, bringing the Big Australian’s total for the past six months to 133.8mt.

It comes despite the miner being locked in negotiations with China Mineral Resources Group over fines produced from its Jimblebar mine. BHP said it continued to “optimise product placement distribution channels and take actions within our operations to preserve operational flexibility and productivity.”

That aside prices for a tonne of the commodity were up 4 per cent to $US84.71/wmt. BHP was optimistic the strong performance had put it in good stead ahead of WA’s cyclone season.

But cost pressures continue to rise at its new Jansen potash project being built over in Canada, forcing the miner to increase the budget a second time.

Building the first stage of Jansen — now 75 per cent complete — originally had a $US5.7 billion ($8.8b) price tag.

That was increased to between $US7b and $US7.4b ($11.4b) in July and per Tuesday’s update is now at about $US8.4b ($12.5b), including contingencies.

“The majority of the cost increase since the estimated range announced in July 2025 is from construction hours and quantities of materials that were not included in previous execution cost estimates. These construction costs were identified following the comprehensive review of Jansen Stage 1 budget and schedule,” BHP said.

And making the most of the red metal frenzy, BHP’s copper production guidance for FY26 was increased to between 1,900kt and 2,000kt from a 1,800kt and 2,000kt band previously.

That’s despite production slipping 4 per cent to 490.5kt compared with the same quarter a year ago. Prices also soared 58 per cent to $US5.90 a pound for the same period. Output for the half-year was flat at 984.1kt.

The pledge to crank up copper comes as BHP’s competitor Rio Tinto remains locked in negotiations with Glencore over a potential mega-merger.

Commenting on BHP’s macro operating environment, chief executive Mike Henry said demand from the group’s biggest customer, China, “remains resilient” and “supported by targeted policy measures and solid exports.”

“Momentum moderated in H2 CY25,notably in construction, manufacturing and infrastructure investments,” he said.

“India is emerging as a key engine of demand, with strong domestic activity sustaining steel and rising copper needs. Forecast global growth in 2026 is around 3 per cent, creating a positive backdrop for commodity demand.”

BHP shares last changed hands at $48.75.