BHP Q4 Earnings Call Spotlights Copper Growth and Cost Discipline

BHP Pushes Copper Growth Into Focus

Craig said that BHP expects attributable copper-equivalent production to grow around 5% annually through fiscal 2035, within companywide growth of 3% to 4% per year from fiscal 2027 to fiscal 2035.

He emphasized brownfield growth predominantly, with the lower-risk pathway reaching about 2.5 million tons of attributable copper-equivalent production by the mid-2030s.

At Escondida, management approved roughly $500 million of precommitment funding for a new concentrator ahead of a final investment decision in 2027 or 2028. The project is expected to provide 230,000 to 270,000 tons per year of copper capacity.

BHP Group Raises the Bar on Operations

Craig said that the BHP Operating System, or BOS, remains the foundation for safer and more productive operations. The Operational Excellence Index rose to 52 from 36 in 2020 after roughly 7,000 initiatives. These initiatives delivered more than $5 billion of first-year cost savings, and Craig has tasked teams with moving the companywide OEI toward 65.

Technology is another lever. Craig said initiatives were delivering incremental EBITDA at an annual run rate of almost $500 million by the end of 2026, with BHP targeting more than $650 million by the end of 2027.

BHP Keeps Growth Spending Elevated

Chief Financial Officer Vandita Pant said that BHP expects capital expenditure of around $11 billion per year on average over the medium term, reflecting updated Jansen Stage 2 estimates and foreign exchange changes.

Pant said more than half of growth spending will go to copper, rising to roughly two-thirds when investment in non-operated joint ventures is included.

She also said that the copper capital program is entirely self-funding at consensus prices, supporting simultaneous investment in four major copper projects while preserving balance-sheet flexibility.

BHP Group Leans on WAIO and BMA

Craig said that Western Australia Iron Ore produces about $10 per ton more free cash flow than its closest peer. BHP plans to sustain production above 305 Mtpa from the fourth quarter of fiscal 2028.

Management also intends to reduce WAIO unit costs below $19 per ton in fiscal 2029. Fiscal 2027 guidance of $20.25 to $21.75 per ton remains subject to diesel movements.

At BMA, Craig said that the steelmaking coal plan does not include a sale. BHP is targeting 43 to 45 Mtpa of medium-term production on a 100% basis, and unit costs below $120 per ton.

BHP Advances Jansen and Copper Options

Craig said that Jansen Stage 1 remains on track for first production in mid-calendar 2027. Once ramped, management expects each stage to generate around $1 billion of EBITDA annually with margins above 60%.

At Copper South Australia, Craig said that BHP is evaluating ways to accelerate production growth. The broader strategy targets up to 650,000 tons of annual copper production in the second phase.

Vicuña is another key option. Craig said that the joint venture is progressing toward a potential Stage 1 final investment decision as early as the end of calendar 2026.

BHP Group Keeps Discipline at the Center

Management paired greater growth ambition with continued capital discipline. Craig tied future value creation to execution, operating stability and project delivery rather than higher commodity prices alone.

Safety also remained foundational after the fatal injury of a contracting colleague at BMA's Peak Downs mine in July. Craig said that leaders are reverifying critical controls while the investigation continues.

BHP's Zacks Rank and Style Scores Stay Mixed

BHP carries a Zacks Rank #3 (Hold). Its Style Scores are uneven, with a Growth Score of B, a Value Score of D, a Momentum Score of F and a VGM Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks' framework gives the strongest preference to Zacks Rank #1 or 2 (Buy) stocks paired with A or B Style Scores. For BHP, the favorable Growth Score is offset by weaker Value and Momentum readings and a middle-range VGM Score. The Zacks Rank can change as earnings estimates are revised following the just-reported results.

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