BHP Profit Climbs as Copper Offsets China Drag on Iron Ore

Core Insights - BHP Group's earnings for the six months ending December increased by over 20% due to rising copper prices, despite stagnant demand in China affecting its iron ore and steelmaking coal sectors [1] - The company's underlying attributable profit reached $6.2 billion, marking a 22% increase and aligning with analyst expectations [1] Copper Division Performance - The copper division, crucial for BHP's growth strategy, contributed over 50% to the company's bottom line for the first time, with underlying earnings before interest, tax, depreciation, and amortization rising 59% to $8 billion [2] - Realized copper prices increased by nearly 30% during the period, and the company achieved approximately 30% growth in copper production over the last four years, positioning itself favorably in the strengthening copper market [2] Iron Ore Business - Earnings from the iron ore segment saw a modest increase of 4%, supported by steel exports and manufacturing demand in China, which helped mitigate ongoing weaknesses in the real estate sector [3] Silver Streaming Agreement - BHP announced a $4.3 billion long-term silver streaming agreement with Wheaton Precious Metals Corp, aimed at capitalizing on high silver prices, related to silver produced as a by-product at the Antamina copper mine in Peru, where BHP holds a 33.75% stake [4] Growth and Capital Discipline - The company is focused on balancing growth, particularly in copper, with a commitment to capital discipline, having made unsuccessful attempts to acquire rival Anglo American Plc [5] - BHP declared an interim dividend of 73 cents, reflecting a 60% payout ratio [5]