BHP Profit Beats Forecasts as Copper Surpasses Iron Ore on AI-Driven Demand

BHP Group reported a stronger than expected half-year performance, with underlying profit rising 22 percent as copper earnings overtook iron ore for the first time in the company’s history. The result reflects surging demand for copper, driven by artificial intelligence infrastructure and the global shift toward cleaner energy.

The world’s largest miner saw its shares climb 7 percent to a record high after announcing robust earnings and a dividend that exceeded market expectations.

Half-Year Profit Rises 22 Percent to $6.20 Billion​

For the six months ended December 31, BHP posted an underlying attributable profit of $6.20 billion, beating the Visible Alpha consensus estimate of $6.03 billion.

The company declared an interim dividend of 73 cents per share, ahead of analyst estimates of 63 cents. The payout ratio stood at 60 percent, reinforcing investor confidence in future capital returns.

“It was a good result,” said Andy Forster, portfolio manager at Argo Investments, a BHP shareholder. “They smashed everyone’s expectations from a dividend perspective.”

Copper Overtakes Iron Ore in Operating Earnings​

Copper, including byproducts such as gold, generated $7.95 billion in operating earnings during the half year, surpassing iron ore’s $7.50 billion contribution. Copper accounted for 51 percent of BHP’s total underlying operating earnings of $15.46 billion.

The performance was largely driven by a 32 percent increase in realised copper prices, along with higher precious metals prices. At the same time, record first-half iron ore production and improved pricing supported overall profitability, despite recent softness in iron ore markets.

Iron ore prices have fallen to a seven-month low this week as supply is expected to expand in the coming years, while inflation continues to lift production costs.

AI and Energy Transition Drive Copper Demand​

Copper demand is accelerating amid rising electricity consumption from artificial intelligence data centres and increasing investment in renewable energy systems. This structural shift has intensified competition among global mining companies for high-quality copper assets.

BHP, already the world’s largest copper producer, emphasized its existing growth pipeline and signaled confidence in organic expansion rather than large-scale acquisitions. The company had previously walked away from an approach to acquire Anglo American.

Chief Executive Officer Mike Henry said the company does not feel pressured to pursue mergers and acquisitions to grow its copper business.

“For the discrete few opportunities that might come along that fit the very strict criteria that we have, we've got the wherewithal to pursue them, but we're not feeling any burning need to,” Henry said during a media call.

$18 Billion Argentina Investment and Production Outlook​

In January, BHP raised the lower end of its copper production guidance for the current year to between 1.9 million and 2 million tonnes, citing strong operational performance across its assets.

The company also announced an $18 billion multi-year investment plan at its Vicuna Corp joint venture in northern Argentina with Lundin Mining. The project is expected to develop copper, gold, and silver resources and has the potential to produce more than 500,000 tonnes of copper annually at peak production next decade.

Silver Streaming Deal and Asset Monetisation Plan​

BHP signed a silver streaming agreement with Wheaton Precious Metals that will deliver an upfront payment of $4.3 billion at completion in exchange for silver from its share of output at Peru’s Antamina mine.

The payment forms part of a broader plan to generate $10 billion from existing assets. According to Henry, these proceeds could support stronger dividend payouts for the full year.

China Iron Ore Negotiations Continue​

Henry also confirmed that negotiations with China over iron ore supply terms remain ongoing, as state buyer CMRG seeks improved pricing conditions for Chinese steelmakers. While discussions have been described as tough, Henry expressed confidence that a resolution will be reached over time.

BHP previously noted a price impact from CMRG’s ban on its Jimblebar fines product in its January quarterly report but did not provide additional details in the latest earnings release.

With copper now contributing more than half of its operating earnings and significant capital returns underway, BHP’s latest results underscore a strategic shift toward future-facing commodities amid evolving global demand dynamics.