BHP closes FY26 with record iron ore and back-to-back ~2 Mt copper

About BHP

BHP Group Limited (ASX: BHP) is one of the world’s largest diversified resources companies, headquartered in Melbourne and listed on the ASX with a secondary listing on the London Stock Exchange. Founded in 1885 at Broken Hill in outback New South Wales, BHP has grown into a global operator across iron ore, copper, steelmaking coal and energy coal, with exploration and development activity spanning potash, nickel and other future-facing commodities.

BHP’s largest earnings contributor is its Western Australia Iron Ore (WAIO) business, which operates a network of mines in the Pilbara including South Flank, Mining Area C, Newman and Jimblebar, connected by company-owned rail to the port of Port Hedland. In copper, BHP holds a 57.5% interest in Escondida in Chile — the world’s largest copper mine — alongside 100% ownership of Spence (Pampa Norte) and Copper South Australia, which encompasses Olympic Dam, Prominent Hill and Carrapateena. BHP’s Jansen potash project in Saskatchewan, Canada, is 84% complete and on track to begin production in mid-calendar 2027, adding a new commodity to the portfolio for the first time in decades.

The year

BHP’s operational review for the year ended 30 June 2026, released on 16 July, covers the group’s full-year production performance and provides FY27 guidance across all major commodities.

In copper, total production of 1,952,800 tonnes was 3% below FY25’s 2,016,700 tonnes, primarily reflecting a planned decline in Escondida’s concentrator feed grade from 1.02% to 0.90%, which weighed on the mine’s output despite record material mined, record concentrator throughput and improved recoveries. Copper South Australia was a standout, delivering record copper production across the hub, with Olympic Dam setting a 20-year copper production record and record refined gold output capitalising on elevated gold prices. Antamina in Peru posted a financial year record of 152,000 tonnes of copper on higher feed grades. In contrast, Spence faced ongoing challenges processing complex hypogene ore, with production down 21% to 213,000 kt; two new projects — the Concentrator Upgrade Recovery project and the Chalcopyrite Leaching project — were both sanctioned in June 2026, with first production expected in FY28 and CY28 respectively. The flash converting furnace breach at Kennecott in late June will also reduce refined copper and gold output at the Utah smelter in H2 FY26, though copper production guidance for the year is unchanged.

In iron ore, WAIO delivered a record result driven by strong supply chain performance across the system. South Flank exceeded annual nameplate capacity, the Car Dumper 3 rebuild completed in Q1, and improved rail network efficiency generated record inflows and record shipments on a 100% basis. Samarco in Brazil recovered strongly, with production up 25% to 7.8 Mt following better-than-planned concentrator performance.

In steelmaking coal, BMA production rose 3% to 18.6 Mt, the highest stripping volumes in five years helping to partially offset the impact of Tropical Cyclone Koji and ongoing geotechnical challenges at Broadmeadow. NSWEC exceeded the top end of its production guidance range in energy coal, producing 16.4 Mt, up 9%.

Strategic significance

The FY26 report lands at a pivotal moment in BHP’s copper growth story. Escondida’s grade will decline further in FY27, with guidance of 1,000–1,100 kt at a concentrator feed grade of approximately 0.70%, but BHP is simultaneously advancing multiple options to rebuild and diversify its copper production base over the medium term. The Vicuña project in Argentina — encompassing the Josemaria and Filo del Sol deposits — received RIGI approval in June, the first mining project to receive Long-Term Strategic Export Projects designation, locking in a stable fiscal framework for 40 years. Vicuña remains on track for a Stage 1 final investment decision in calendar 2026.

In the United States, BHP signed definitive agreements with Faraday Copper Corp to transfer its San Manuel asset in Arizona in exchange for approximately 32.5% of Faraday on a non-diluted basis, creating a pathway for a new Arizona copper hub combining San Manuel’s infrastructure with Faraday’s adjacent Copper Creek project. Resolution in Arizona and Copper SA’s potential to double production are further medium-term options BHP is actively progressing.

In iron ore, the Ministers North approval is significant. The ~US$0.9 billion project leverages existing Yandi infrastructure to develop a high-grade Brockman deposit targeting around 20 Mtpa, supporting sustained WAIO production above 305 Mtpa on a 100% basis from Q4 FY28, at projected returns exceeding 30% based on long-term consensus iron ore prices.

Conclusion

BHP enters FY27 as a simpler, more focused business following the completion of the Carajás divestment in April 2026, with a disciplined cost base, record Pilbara infrastructure and a copper growth pipeline that spans four continents. The near-term production dip from Escondida’s grade decline is well understood and well flagged, and the market will look to the FY26 financial results on 18 August for confirmation that strong realised prices and cost discipline are converting into robust cash generation and shareholder returns.