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

BHP made a bumper profit from record copper prices and its new chief executive has claimed victory over the unions which infiltrated its iron ore empire in WA.

Shares in the Big Australian rose 3.2 per cent to $64.19 in early trade after it revealed a 9 per cent rise in full-year net profit of $US9.8 billion ($13.8b) to declare a final dividend of US99¢ a share, surging from last year’s US60¢ payout.

BHP’s underlying earnings for copper totalled $US18.2b, up 48 per cent, despite a well-flagged dip in production to 1.95 million tonnes — down 3 per cent on a year earlier. It also marks BHP’s first full-year result in which copper overtook iron ore earnings.

Total group-wide revenue for the year jumped $US7.5b to $US58.8b.

BHP boss Brandon Craig, who started in the top job on July 1, said the copper boom powered the miner’s strong result.

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

“For the first time, copper contributed more than half our underlying (earnings) 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 financial year 2035.”

Current output of copper from its mines in Chile is slipping as grades decline and mines age, prompting BHP to invest billions of dollars in South America and South Australia just to maintain production.

As the world increasingly turns to artificial intelligence, BHP is still sitting pretty as the world’s biggest producer of copper, which is used to build power grids, cooling systems and wiring that AI data centres need to operate.

BHP has forecast that global copper demand will rise to 50 million tonnes a year by 2050 from around 34Mt currently.

Fight for the iron ore throne

Despite the copper focus, iron ore remains a key driver of BHP’s bottom line.

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

The crown jewel of BHP’s iron ore empire is its Pilbara operation, which has increasingly been the target of unions as part of their broader campaign to re-claim their control over WA’s iron ore mines after decades in exile.

Unions escalated industrial action to 48-hour strikes at BHP’s sole WA iron ore export hub, Port Hedland, earlier this month.

Disruptions from the port strikes were estimated to cost BHP about $20m in lost revenue, but the Big Australian still shipped more than $200m worth of iron ore over the period.

And last month, a majority of workers at the huge South Flank and Mining Area C iron ore mines sided with BHP over unions in landmark wage deal vote.

Mr Craig on Tuesday suggested that BHP was winning its war against the unions.

“I think you’ve seen the response from our workforce, which has been very supportive to the business,” he said.

“Because of that, we’ve managed to work through all of the protected industrial action without any material impacts.

“And because of that, I think we’re going to continue to perform strongly and we’re not expecting the industrial action to have any particular negative effect on our performance.”

The rise of China Mineral Resources Group — a Beijing-owned centralised buying agent acting for many of the country’s steel mills — is the other major threat to BHP’s Pilbara iron ore stronghold.

CRMG wants to push down iron ore prices to boost steel mill profit margins.

In response, the Albanese Government is quietly investigating ways to give the Pilbara iron ore mining giants special dispensation from antitrust laws so they can negotiate prices as a bloc.

On Tuesday, Mr Craig played a straight bat when asked if BHP was open to the idea of working in cahoots with Rio Tinto and Fortescue to preserve iron ore prices.

“I think the principle that we subscribe to at BHP is global, liquid, seaborne-traded markets — we want to see efficient price formation,” he said.

“We want markets to function efficiently.”

BHP expects Chinese demand for iron ore to plateau at around 1 billion tonnes a year “for the rest of the decade” but is optimistic of India’s growth potential.

“India, historically a major iron ore exporter, saw imports grow to 12Mt in 2025 and this has continued into 2026 with imports rising further.

“This trend reinforces the view that India is undergoing a structural shift towards net imports, as domestic iron ore supply lagging behind steel capacity growth — with some market expectations of imports above 80Mt by 2030.”