BHP ready for global copper boom as red metal takes crown from iron ore

Copper has outpaced iron ore as BHP’s biggest earner, as prices for the red metal hit record highs last financial year as demand for data centres exploded.

The Big Australian on Tuesday reported underlying earnings for copper totalled $US18.2 billion ($25.6b) in the year to June 30, despite a well-flagged dip in production to 1.95 million tonnes — down 3 per cent on a year earlier.

Iron ore earnings were up one per cent to $US14.5b as production hit a record 265mt. Average realised prices rose 3 per cent to $US84.56 a tonne “supported by resilient Chinese demand”.

Total group-wide revenue for the year leapt $US7.5b to $US58.8b as BHP capitalised on higher copper, iron ore and steelmaking coal prices.

Net profit was up 9 per cent to $9.8b and the miner will pay out a final dividend of US99¢ a share — up from last year’s US60¢.

BHP chief executive Brandon Craig, who started in the top job on July 1, said the copper boom helped the miner top a milestone in FY26.

“Copper is the engine that is driving BHP’s growth,” Mr Craig said.

“For the first time, copper contributed more than half our underlying EBITDA and generated significant free cash flow, which means our copper growth is self-funding.

“We have a well-defined project pipeline across Chile, Australia and Argentina that can potentially lift copper production by around 40 per cent by FY35.”

As the world turns more and more to AI solutions, BHP is sitting in the box seat to supply copper, which is used to build power grids, cooling systems, and wiring that AI data centres need to operate.

It forecast global copper demand will rise to 50mt a year by 2050 from around 34mt currently. Its strategy has been to increase its exposure to the metal key to electrification, which drove an unsuccessful bid for Anglo American last year.

But current output of copper from its mines in Chile is slipping as grades decline and mines age, prompting it to invest billions just in maintaining production.

The miner said the global economy and commodity markets demonstrated “considerable” resilience last financial year despite a backdrop of heightened geopolitical tension, trade policy uncertainty and shifting monetary and fiscal settings.

Copper prices rose strongly to new record highs, while steel raw material prices recorded positive year-on-year growth.

“Activity was supported by a strong uplift in technology-related investment, particularly into artificial intelligence and the supporting physical infrastructure, including electrification, even as conflict in the Middle East disrupted key trade flows and lifted energy and freight costs.,” it said.

BHP said a growing global focus on building resilience, digitalisation and electrification were expected to lead to higher investments in the “physical economy” which will continue to support demand for its commodities.

“BHP is well set for what comes next,” Mr Craig said.

“We have significant opportunity to further lift performance across our assets and a clear pathway for growth.”