Core Viewpoint - BHP Group reported a stronger-than-expected half-year underlying profit, primarily driven by copper, which has now surpassed iron ore in earnings for the first time, due to increased demand fueled by AI and cleaner energy initiatives [1][2]. Financial Performance - First-half underlying attributable profit rose 22% to $6.20 billion, exceeding the Visible Alpha consensus of $6.03 billion [3]. - BHP declared an interim dividend of 73 cents per share, surpassing market estimates of 63 cents, with a payout ratio of 60% [3]. - Copper, including byproducts, contributed $7.95 billion to operating earnings, higher than iron ore's $7.50 billion, making up 51% of total underlying operating earnings of $15.46 billion [3]. Market Dynamics - Demand for copper is surging due to rapid growth in power use for AI data centers and the transition to cleaner energy, leading to increased competition among mining companies for high-quality copper assets [2]. - A 32% increase in realized copper prices, along with higher prices for precious metals, significantly boosted profits [4]. - Iron ore prices have recently hit a seven-month low, and unit costs for iron ore increased by 7% to $19.41 per metric ton [4][5]. Strategic Focus - BHP is focusing on organic growth options for copper and does not feel pressured to pursue mergers and acquisitions, having previously walked away from a potential acquisition of Anglo American [7]. - The company has raised its copper production forecast for the year to between 1.9 million and 2 million tons, citing strong operational performance [8]. - BHP announced an $18 billion multi-year investment plan to develop copper, gold, and silver mining projects in northern Argentina, with potential peak copper production exceeding 500,000 tons annually [9]. Partnerships and Agreements - BHP entered a silver streaming agreement with Wheaton Precious Metals for an upfront payment of $4.3 billion, part of a targeted $10 billion to be raised from existing assets to potentially enhance dividend payouts [11].

BHP Ltd (ASX:BHP) has replicated what happened last week when ASX “Mag2” counterpart Commonwealth Bank (ASX:CBA) shot up on a better-than-expected earnings result, with Australia’s largest company shooting up +7% on the bourse – unusual volatility for the Aussie giant, even for earnings season.Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.Headline half-year results make clear why the stock has now trav ...

Core Insights - BHP iron ore sales in China resumed, with a 170,000-metric-ton cargo sold to a local trader, alleviating fears of a ban on Australian iron ore exports by China [1][3] - China Mineral Resources Group (CMRG) offered eight cargoes of BHP iron ore totaling 1.14 million tons to steelmakers, indicating ongoing demand despite previous purchasing halts [2][4] - Concerns about a potential ban on BHP's Jimblebar fines product persist, as trade in this specific grade remains frozen [5][6] Group 1 - BHP sold a cargo of 170,000 metric tons to a Chinese trader, marking the first trading day after China's national holiday [1] - CMRG's offer of 1.14 million tons of BHP iron ore to steelmakers suggests a strategic move to centralize purchasing and negotiate better terms [2] - Previous reports indicated that CMRG advised steelmakers to pause purchases of BHP's Jimblebar fines, raising concerns in Australia about a potential ban [3] Group 2 - Trade in BHP's Jimblebar fines remains frozen, with no cargoes sold or offered on the recent trading day [5] - CMRG's negotiations with BHP are part of broader commercial discussions, as indicated by BHP's CEO [6] - The limited production of Jimblebar fines (approximately 40 million tons annually) is not expected to significantly impact iron ore prices [6]