20th Jan 2026 01:15
(Alliance News) - BHP Group Ltd on Tuesday raised its annual copper guidance after reporting mixed production results for the second quarter of financial year 2026, while also confirming significant cost increases for its Jansen potash project.
The Melbourne, Australia-based diversified miner said copper production in the three months ended December 31 fell 4.0% to 490,500 tonnes from 510,800 tonnes in the same quarter a year earlier.
Iron ore production increased 5.3% to 69.7 million tonnes from 66.2 million tonnes over the same period.
Steelmaking coal production fell 3.1% to 4.3 million tonnes from 4.4 million tonnes, whereas energy coal production surged 25% to 4.6 million tonnes from 3.7 million tonnes.
For the first six months of financial year 2026, copper production was 0.3% lower at 984,100 tonnes from 987,100 tonnes a year prior.
Meanwhile, iron ore was up 2.3% at 133.8 million tonnes from 130.8 million tonnes, steelmaking coal grew 2.4% to 9.2 million tonnes from 8.9 million tonnes, and energy coal rose 10% to 8.1 million tonnes from 7.4 million tonnes.
Chief Executive Officer Mike Henry said: "BHP delivered another half of very strong performance with operational records at our copper and iron ore assets. This was achieved safely and in a positive commodity price environment, with copper prices up 32% and iron ore prices 4% higher year on year."
In light of recent operational performance, BHP has lifted its copper production guidance for the full-year ending June 30 to 1.9 million to 2.0 million tonnes from a previous range of 1.8 million to 2.0 million tonnes.
In financial year 2025, BHP produced a total of 2.0 million tonnes of copper and going forward the company is targeting "a significant copper growth pipeline and a pathway".
"We have increased FY26 group copper production guidance off the back of stronger delivery across our assets. Our flagship copper operation, Escondida, achieved record concentrator throughput and we have increased the FY26 production guidance range," CEO Henry said.
Additionally, BHP said its Jansen potash project in Canada is now 75% complete and on track to commence production in the middle of calendar year 2027, marking a reversion to the company's original schedule.
BHP confirmed that the total investment for Jansen stage one will now increase to USD8.4 billion, including contingencies, up from the previous cost estimate issued in July of USD7.0 billion to USD7.4 billion.
Initially BHP had anticipated the investment cost to be USD5.7 billion when the project was first approved in August 2021, and so the updated cost represents a 47% increase from this.
BHP said: "The majority of the cost increase since the estimated range announced in July 2025 is from construction hours and quantities of materials that were not included in previous execution cost estimates. These construction costs were identified following the comprehensive review of Jansen stage one budget and schedule."
BHP added that Jansen stage one has an updated internal rate of return of 7.9% to 9.1%, with an updated expected payback period of 11 to 15 years from first production.
Meanwhile, underlying earnings before interest, tax, depreciation and amortisation margins for Jansen stage one stand at approximately 63% to 64%, which BHP attributed to its low-cost position.
BHP shares were down 1.2% at AUD48.15 in Sydney on Tuesday morning.
By Elijah Dale, Alliance News senior reporter Asia-Pacific
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.
Related Shares:
BHP Group