BHP Group Half-Year Profit Surges as Copper Overtakes Iron Ore on AI-Driven Demand

BHP Group reported a stronger-than-expected half-year underlying profit, driven by a sharp rise in copper prices fueled by artificial intelligence infrastructure and clean energy demand. The world’s largest miner saw copper surpass iron ore as its top earnings contributor for the first time, underscoring the growing importance of the red metal in global markets.

For the six months ended December 31, BHP posted underlying attributable profit of $6.20 billion, up 22% year-on-year and above the $6.03 billion consensus forecast. The company declared an interim dividend of 73 cents per share, exceeding market expectations of 63 cents and reflecting a 60% payout ratio. Investors responded positively, sending BHP shares up 7% to a record high.

Copper, including gold byproducts, generated $7.95 billion in operating earnings, accounting for 51% of BHP’s total underlying operating earnings of $15.46 billion. Iron ore contributed $7.50 billion. A 32% increase in realized copper prices, along with stronger precious metals prices, significantly boosted results. Meanwhile, iron ore production reached a first-half record, although prices recently touched a seven-month low. Unit costs for iron ore rose 7% to $19.41 per metric ton.

Rising electricity demand from AI data centers and the global transition to renewable energy have intensified competition for high-quality copper assets. Despite this, CEO Mike Henry emphasized BHP’s strong organic copper growth pipeline and downplayed the need for major acquisitions after walking away from a bid for Anglo American last year.

BHP recently raised its copper production guidance to between 1.9 million and 2 million tons for the current fiscal year. The company also unveiled an $18 billion multi-year investment plan in Argentina through its Vicuna joint venture, targeting potential peak annual production of over 500,000 tons of copper next decade.

Additionally, BHP signed a $4.3 billion silver streaming agreement with Wheaton Precious Metals as part of a broader $10 billion asset monetization strategy, supporting future dividend strength.