On Friday morning (July 18), shares of BHP Group Limited (ASX: BHP) climbed nearly 2% to $39.93. The rally followed the release of the company’s Q4 and full-year operational report, which highlighted strong production in copper and iron ore.
Copper output increased by 2% quarter-on-quarter to 516,200 metric tons, driving full-year FY2025 production up by 8% to a record 2.0167 million metric tons. Iron ore production also remained robust, rising 2% in Q4 to 70.3 million metric tons, with annual output up 1% to 263,000 metric tons. However, market expectations had pegged iron ore production at 75.4 million metric tons, indicating that while BHP outperformed in copper, it fell short in iron ore.
Additionally, metallurgical coal and energy coal production rose by 5% and 8%, respectively, though both still missed market forecasts.
Despite strong copper performance, BHP’s Jansen potash project faces significant challenges. The company announced that the project’s estimated capital expenditure has surged from $5.7 billion to $7.0–7.4 billion, with first production now delayed to mid-2027. Key factors driving cost increases include inflationary pressures, design changes, and lower-than-expected construction efficiency.
Furthermore, due to concerns over medium-term oversupply in the potash market, BHP is considering postponing the Jansen Stage 2 project until FY2031.
BHP CEO Mike Henry expressed satisfaction with the company’s performance, emphasizing that record copper and iron ore production demonstrated the business’s resilience and growth potential. He noted that despite global economic uncertainty, commodity demand remains stable, particularly in China, where domestic demand has held up despite a downturn in the real estate sector. Investments in renewable energy, grid infrastructure, and the expansion of the electric vehicle market are further driving demand for copper and steel.
However, Henry acknowledged that slowing economic growth and trade uncertainties could pose challenges, though stimulus measures from the U.S. and China may help mitigate short-term impacts.
Despite setbacks in the potash project, the market appears more focused on BHP’s core operations—particularly its strong copper performance—while temporarily overlooking cost concerns in the potash venture.
