By Rhiannon Hoyle
BHP Group upgraded guidance to investors for the copper business at the heart of its growth plans, while confirming a long-awaited supply deal with China for its lucrative iron-ore division.
The world's biggest miner by market value on Wednesday said it now expects copper production in the year through June to be in the upper half of its guidance range of 1.9 million to 2.0 million metric tons. The company only three months ago revised that guidance from an earlier range of 1.8 million to 2.0 million tons.
It also improved its cost estimates for the Escondida mine in Chile where it runs the world's biggest copper-mining operation.
BHP's third-quarter copper output was 3% lower than a quarter earlier and 7% below the year-prior period, missing market expectations slightly.
"The bottom line is BHP has operated well in copper, especially at Escondida ahead of the lower expected grades in the coming years," Jefferies said in a note to clients. Shares were 1.4% higher by early afternoon in Sydney.
BHP in February announced that copper, for the first time, accounted for the largest share of the giant miner's earnings--overtaking iron ore, which has long been the miner's profit engine.
Yet iron ore "did the heavy lifting" in BHP's third fiscal quarter, RBC Capital Markets analyst Kaan Peker said. Production in that division was 2% higher year over year, slightly above analyst estimates.
"Importantly, BHP concluded iron ore sales contract negotiations with the China Mineral Resources Group," said Peker.
In the quarterly report, BHP said it has concluded contract talks with China's state-owned iron-ore buyer, without providing further details.
The deal ends a monthslong standoff between the world's biggest miner and the world's largest iron-ore buyer that has clouded the market for the steelmaking ingredient since September.
While BHP repeatedly assured investors that it continued to sell the iron ore it was producing, analysts said China appeared to be wresting control over prices away from the industry's giant miners.
BHP said its average iron ore price fiscal year-to-date is 2% higher than the same period a year earlier. The company is the world's third-biggest producer of iron ore, after Vale and Rio Tinto.
Like a number of its rivals, BHP has put copper at the heart of its growth plans, forecasting rising demand for the industrial metal used to build electric vehicles, power infrastructure and data centers. The miner several times sought to buy peer Anglo American in recent years to turbocharge its copper business, albeit unsuccessfully.
BHP, already the world's biggest miner of the metal, has previously said that it isn't reliant on deals and that it already has plenty of copper reserves in-house it can look to develop.
"The question now is whether BHP starts to accelerate its commitment to growing in copper," Jefferies said in its note.
BHP Chief Executive Mike Henry, who will be succeeded by Americas chief Brandon Craig in July, said Wednesday that the miner continues to make steady progress on its copper growth plans.
Henry also sought to reassure investors that the giant miner was well positioned to handle market volatility amid conflict in the Middle East, which has driven up prices for fuel and a number of raw materials.
"Our centralized procurement capability and our low-cost operations have positioned us advantageously in the face of industry wide pressure on the cost of energy and consumables as a result of the conflict in the Middle East," Henry said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
April 21, 2026 23:04 ET (03:04 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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