Why Copper Has Overtaken Iron Ore at BHP
$BHP Billiton(BHP)$’s full-year results marked a structural change in the world’s largest listed miner: copper generated more operating earnings than iron ore for the first time. That makes BHP increasingly sensitive to electrification and AI-related power investment, but it also concentrates more value in a commodity trading near historically strong levels.
BHP reported on August 18 for the year ended June 30. Underlying EBITDA increased 27% to approximately $32.9 billion, underlying attributable profit rose 30% to $13.2 billion and free cash flow increased 83% to $9.8 billion. The company declared total dividends of $1.72 per share, its highest annual distribution in four years. BHP’s 2026 annual report provides the audited results and management’s strategy.
Copper and associated by-products produced $18.19 billion of underlying EBITDA, compared with $14.53 billion from iron ore. Record copper pricing, improved costs and by-product credits from gold, silver and uranium drove a copper margin near 70%. Management expects to increase copper production by as much as 40% by 2035 through projects in Chile, Australia and Argentina. Reuters’ results analysis provides the segment comparison and market expectations.
The bullish case is that copper supply is difficult to expand while electricity grids, renewable generation, electric transport and data centres require more metal. BHP owns large, long-life assets and can fund much of their expansion internally. Iron ore, metallurgical coal and future potash production provide additional diversification.
Rescue workers search for victims in the Brazilian village of Bento Rodrigues after the collapse of a dam at an iron ore mine co-owned by BHP Billiton.
The bearish case is commodity reflexivity. High prices encourage substitution, recycling and new mine investment, while weaker Chinese construction or global industrial demand could reduce consumption. Large copper expansions require years of permitting and capital, and the Jansen potash project has already produced a $2.3 billion impairment. Political and fiscal conditions in Chile and Argentina add uncertainty.
BHP’s US-listed shares closed at $88.37 on August 17, before the results, after ranging from $87.48 to $90.20. The Australian shares subsequently gained, making $90 the first ADR resistance test when US trading resumes. Approximately $86.75–$87.50 is initial support. The post-results move will be more informative than Monday’s pre-release range.
The evidence leans moderately bullish because cash flow, margins, balance-sheet strength and copper exposure improved together. The view would be invalidated by copper prices falling sharply, expansion costs escalating, production guidance weakening or iron-ore deterioration overwhelming copper growth. This is personal opinion for education and is not financial advice.
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