BHP Copper Growth
Copper overtakes iron ore to drive over half of BHP earnings in fiscal 2026.
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Key Points
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Copper generated approximately US$18 billion in FY2026 EBITDA, about 54% of BHP’s group total, with an EBITDA margin near 70%; group underlying EBITDA was approximately US$32.9 billion.
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Escondida’s output is expected to decline to between 1.0 million and 1.1 million tonnes in FY2027 because of falling ore grades. BHP has approved US$500 million in pre-commitment funding for a new concentrator, with a full investment decision expected in calendar 2027–28.
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Ministers North will operate as a satellite extension of the Yandi mine, using existing processing, rail and port infrastructure. The project includes a 13-kilometre haul road and land bridge, as well as new primary and secondary crushers at Yandi.
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Ministers North is structured with BHP holding an 85% interest and Japanese trading houses Itochu and Mitsui holding 8% and 7%, respectively; site works were scheduled to begin in July 2026, with first ore expected in fiscal 2029.
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The reported Jimblebar proposal involved China Baowu potentially acquiring a 15%–25% minority stake from BHP’s existing interest. The reports were attributed to unnamed sources, and BHP said any arrangement would require agreement on commercial terms and the relevant foreign-investment approvals.
Copper has become BHP's largest profit engine for the first time in the company's history, generating about US$18 billion in earnings in fiscal 2026 — more than half of the mining giant's total profits. The metal surpassed iron ore, BHP's traditional focus, as the company's attributable copper output hit 1.95 million tonnes, led by Chile's Escondida mine.
BHP is now betting big on copper's future, outlining growth projects that could boost copper production by roughly 40% by fiscal 2035 across Chile, Australia, Argentina and Arizona. But the company faces a major hurdle: ore grades are declining, meaning BHP will need to invest heavily to keep production climbing.
Escondida's Decline Forces Major New Investment
Chile's Escondida mine, BHP's largest copper asset, is expected to produce between 1.0 million and 1.1 million tonnes in fiscal 2027 — down from 1.95 million tonnes now — because falling ore grades make extraction harder and more expensive. To fight this decline, BHP has approved US$500 million in upfront funding for a new concentrator at Escondida, with a final investment decision expected in 2027 or 2028.
Iron Ore Remains Central Despite Copper's Rise
While copper now dominates BHP's profits, iron ore still plays a key role in the company's strategy. BHP approved a US$900 million investment in the Ministers North project in Australia, which will add about 20 million tonnes of iron ore annually starting in fiscal 2029. The project reuses existing infrastructure at the nearby Yandi mine, keeping costs down.
Ministers North is structured with BHP owning 85% and two Japanese trading houses — Itochu and Mitsui — holding 8% and 7% respectively. Site work began in July 2026, with first ore shipments expected in fiscal 2029.
Potential China Baowu Partnership Remains Unconfirmed
Reports emerged that Chinese steelmaker China Baowu may take a minority stake in BHP's Jimblebar iron ore mine, potentially acquiring 15% to 25% of BHP's interest. BHP confirmed it has received such proposals but said any deal would require agreement on commercial terms and approval from Australian regulators.
Copper's Strong Margins Support Growth Spending
Copper's profitability — with an EBITDA margin near 70% — is giving BHP the financial firepower to invest in future projects. The company's total underlying EBITDA reached approximately US$32.9 billion in fiscal 2026, with copper accounting for about 54% of that total, according to Kalkine. This dominant profit contribution is reshaping how BHP prioritizes its portfolio.
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