必和必拓 (BHP) 2026 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to BHP's results for the December 2025 half-year investor and analyst teleconference. I advise you that this conference is being recorded today.

(Operator Instructions)

I would now like to hand the conference over to Mike Henry, Chief Executive Officer, BHP Group.

Well, thank you, operator, and good morning, everyone. I think it's probably good morning for most of you. Good evening to anybody joining from this time zone. I do have Vandita and Mark in the room with me today, who I know you will all know.

Look, what are the takeaways from today's results? Strong operating result for sure. You would have seen this coming through in the or previously, but group copper equivalent growth up 2% for the year, and at the same time, cost down 5%, which in real terms is a 7% cost decline.

And, one of the points we made in today's presentation is that we are the only major Pilbara producer to generate real cost declines since COVID, which I hope you can all read into that, just how sharp our focus is on operational excellence and the enabling effect that we have through the BHP operating system. And it's really this confidence in our underlying operational performance coupled with our positive outlook that has enabled us to declare a substantially higher dividend this happened, which is up over 40% to USD0.73 per share.

Of course, in the mix, we also had the Western Australian iron ore power deal that we did with GIP. At USD2 billion. And then today, we've announced a silver streaming deal with Wheaton for $4.3 billion for Anttamina or Antamina Silverstream. So you can see us continuing to sharpen up our approach to capital allocation and ensuring that we're hunting down every opportunity to generate maximum returns for the capital that we have deployed in the business.

Now off the back of our strong operating performance in Escondida, we did announce an increase to copper guidance for 2027 today by 100,000 tons, combined with the increase in 2026 guidance, that means that we've increased overall group copper guidance for '26 and 2027 by 150,000 tons. And this is at a time, of course, when many of our competitors are cutting.

So it's a real differential and advantage for us in a time of high copper prices.

You'll have seen that in the presentation we're providing a lot more detail, and many of you have been asking for that on our copper growth program right across the group.

You've heard me say many times that if all we did in the coming years is execute on our growth program in copper and in potash, that's already going to be a great result for shareholders, and hopefully we can see why we're so confident, given some of the detail that we've released today. Our copper growth program will see copper production increase 5% on a CAGR basis from 2027 to 2035.

And based on the CapEx estimates we're now providing, you can see that the capital intensities behind this growth are pretty attractive. Now, in respect of copper South Australia, we do have more, or we plan to say more, on a copper South Australia site visit later this year, which I hope that many of you can join. So overall, company performing well operationally, financially, building on this track record that we've had in recent years, and continue to continuing to execute well, strategically, and you can see the fruits of that labor now coming into the fore.

Operator, I'll stop there and open up the lines for questions.

Thank you.

Matt Green, Goldman Sachs.

Good evening, Mike and Vandita. I just ask, on Jimblebar , you realized pricing at the back end of last, of last half was actually ahead of one of your major peers in the Pilbara, and production from Jimblebar is quite strong. So can you just comment on the sales? Are you blending this material and selling it to other, Asian markets, or is a big chunk of this material still on your balance sheet?

Well, so the, You know what's the overall takeaway from the results last half is we're continuing to operate well. We're managing to move our products, so it was a strong half for us production-wise, and as you correctly point out, the realized prices that we had were pretty strong. Now that's not to take away from the fact that we are in tough negotiations with CMRG, as you would expect.

Specifically in respect to Jimblebar, we have seen some softness in demand for Jimblebar. You've seen the reporting around that, but we've been actively mitigating that by increasing our sales of other products, and you would have heard previous commentary from us talking about the fact that we have many distribution channels and other levers available to us to deal with what's happening.

So that shouldn't be any surprise to you. Now, I'm not going to go into the specifics as to exactly what we're doing, and I don't think you'd expect me to, given that this is a commercial negotiation. But I do hope that that you can all take away confidence from the results that we're delivering, including in whale, to that, we've, we're doing a pretty good job both operationally and in terms of our our marketing team.

To continue to run that business well.

That, that's great. Thanks, Mike. Appreciate the con content, sir. And just on this, $10 billion target of unlocking latent value in the portfolio, what, what's limiting you to that $10 billion? Is there scope for more? And if so, what's preventing you from this target at this stage?

So I'm, I'm going to ask Vandita to comment on this, but, $10 billion I think the sum seemed like a pretty ambitious number at the time. And in short order we've achieved, over $6 billion. There are other opportunities across the group, but, my view, Vanita, is let's get to the 11th and then we can look at as to whether there's further to go.

Start making the KPIs on the fly here, my God.

But overall, like Mike said, ambitious number it looks like, but we are 6.3 already down, and reality is, as we have talked about earlier, that we have a big capital base of rich infrastructure assets, power assets, diesel assets, we have existing assets where there is a, there is potentially an opportunity to do something and equally. As we go into our growth programs, there is infrastructure to be, started afresh for those, programs, and that also lends itself to these kind of structures. What I should say though, is just because we're doing big numbers, you should not read into it that we will do any deal which gets us to these numbers. Our bar on these deals is very high.

Which includes no strategic and operational control loss. These are very important assets for our operations. We don't want to risk any of that. And equally to be very sharp around additional value realization. Both these deals, as you would have seen, there is additional value, and it is unequally so rather than on the margin. So that would be our. High bar for this, but of course for the silver deal today, a great result. We have done it for a noncore commodity for a production profile that we know well and in the background of very strong silver prices and getting value which is almost a full value of our [Etammina] stake as per consensus valuation.

Myles Allsop, UBS.

Yeah, thanks. A couple of questions. Maybe first on, [Viunia]. I mean, this has all the ingredients to be, a bit of a nightmare project, yeah, given elevation, greenfield, cross border, and so on. So what measures does the joint venture have in place that give you comfort that you can manage the risk of that greenfield project? That's the first question.

Okay, Myles, so it's, I mean, you're right, it is a greenfield project that has technical challenges associated with it.

Having said that, stage one is essentially the, it was further advanced in its planning because it was the old Jose Maria project that Lindin Mining had. Now the Lindin's, of course, very experienced in bringing on projects in more challenging circumstances. And they've got a lot of experience in Argentina, which helps to de-risk things as well. So from a BHP perspective, in going into a new jurisdiction like Argentina, dealing with a different set of circumstances, we are very kind of acknowledging of our own limitations or where we can benefit from the experience and capability of others.

And that's exactly how we see the partnership with the with the with the Lundins. Now we are doing this in a staged fashion, so this isn't a big bang project. It's Stage 1, then Stage 2, Stage 3. We'll learn between the different stages, which goes to your point around de-risking. And not surprisingly, stage 1 is at a lower elevation than Stage 3 would be. It has less infrastructure than Stage 2 and 3. All of that is about de-risking things and frankly about speeding things up as well.

Okay, and maybe, just thinking about, the proceeds coming in, going into the capital allocation framework, how should we think about, returns to shareholders, the preference between dividends and buybacks at this juncture.

So we don't have a strong preference in terms of dividends versus buybacks miles. We consider it every 6 months, as we've said previously, if you're going to do buybacks, you want it to be material enough.

We do take into account shareholder sentiment and so on, but it's genuinely a consideration each 6 months, and buybacks, do remain one of the possibilities in the future. What I'd like shareholders to take away from this set of results is we had strong, consistent underlying operational performance with good cost control. We had a constructive price environment, and against the back of that confidence, when coupled in with, the further cash ahead of us on the back of the Western Australian iron ore power deal, we've elected to, pay a dividend that's above consensus, it's 60% or USD0.73. Now, of course, as we look to the full year, we, our expectation is that we'll continue to be operating strongly, and you see that coming through in our guidance included, including upgraded guidance in copper.

Price dynamics remain healthy across the suite of commodities, and we will now have a further USD4.3 billion coming in through the wheat and silver streaming deal. And you can see that we do take into account the interests of shareholders quite strongly.

Liam Fitzpatrick with Deutsche Bank.

Hi Mike and Vandita, first question, maybe asking the shareholder returns on a slightly different way when we think about the disposals, excuse me, and the 10 billion threshold, is that lower sort of 10 billion a firm level, and so any move below that we should assume that, cash will come back to shareholders, or would you be happy to go below that, just given the future CapEx, and then perhaps just a technical one as well on the debt. There will be an entry here in terms of deferred income from the streaming deal. Will that be included within your net debt or excluded?

No, well.

I can confirm the latter, which is there is no inclusion of the deal from a net debt perspective and rating agencies as well, so it's quite aligned.

And the first part of the question, Vandita is around, if I paraphrase, it was, will we go below the bottom end of our net debt range given that we've got growth ahead of us, as we see this cash coming in?

No, not really, because that that. The target range was done, as sized on the upper end for what our resilient balance sheets should be and lower end because otherwise it starts to become really suboptimal for the scale of our business. So from my perspective, we have the ability to manage between the users of cash, be it capital or be it shareholder return, through the range over a period of time.

So, Liam, just like we say that. If we can have go outside the range on the upper end, but coming back in within a short period of time, I guess technically we could do it on the lower end of the range as well, but as Vandita says, we don't foresee that at this point in time.

Okay, that's great. If I could do one quick follow-up just on the projects and the CapEx, you've given a lot of detail on the copper projects. Does the 10 billion sort of medium term CapEx threshold?

Or targets still hold given that we could have three big couple of projects being approved.

It still holds the, but an important point to note here is that the Cunia capital is not included in that number because the equity account, a joint venture. But at the same time, we're accounting for 100% of the Escondida CapEx. And so if you net those two factors out and think about things on an attributable CapEx basis, they about balance out between the two of them and the 10 billion holes.

(Operator Instructions)

Jason Fairclough with Bank of America. Please go ahead.

Yes, good evening, Mike and Vandita, and thanks again for doing these sessions for us in London. Look, two for me, I guess. First, on the streaming deal, I mean, it looks like a fantastic outcome. On our numbers. It's negative IRR for Wheaton on reserves. How do you think about streaming deals and the rest of the business? Is this one and done, or how open minded are you here?

We're not, I mean, of course, we will look at every single opportunity, but, and Vanita spoke to this earlier, there was a very specific set of circumstances in respect to this deal in that it was, silver, smaller commodity for us noncore. It was at Antamina where, our risk of giving away upside is lower because we've got a very clear mine plan going forward, and really it's about life extensions and that that's been incorporated into the weakened deal. Whereas if we started looking at gold streams, for example, out of Copper South Australia or out of Vikunya, then the risk is that we end up entering into the deal, but later come to regret it because there's more upside on the production front than we can currently see, today. So, I wouldn't say that you're going to see a lot more of these deals, coming through.

Okay, thanks, Mike. Look, the second one would be just on M&A. You did make a. Somewhat short lived follow-up approach to Anglo in November last year so I'm just wondering any evolution in your thoughts on potential M&A given some of the other live situations in the space.

No, so our position on M&A really has remained unchanged, and that is that, as we've been saying for years now, we've got such a great story internally between, getting more out of the assets every day that we currently run, and, executing the growth that we have ahead of us now in both copper and potash. If that's all we do for the next 10 years, that's a great story for shareholders, and you can see that coming through the The slide that we have in the pack that looks at free cash flow generation both investment and growth under different scenarios, but having said that, we're BHP, we've got the capacity to pursue other opportunities where we believe that there's incremental value to be created for BHP shareholders, but we're very disciplined, and it's only going to be in the commodities we like, assets that are aligned with BHP's strategy of owning large, long life, low cost assets with expansion potential. And we have to seize the opportunity to create or or capture differentiated value through BHP's ownership, and as you can imagine, that's not a big opportunity set. So our focus day in day out focus is really on running the base business ever better and executing the growth that we have ahead of us.

Alexander Pierce, BMO.

Great, thanks. So my first question is, around Jansen. So given the reshuffling of, Stage 1 and 2 timing and CapEx as you recently updated us with, can you confirm if the updated stage one CapEx includes any demobilization costs within the two stages?

Well, so it includes all costs, Alexander, so the, and stage two costs, of course, we've yet to come to market with, so that will come through in the middle of the year, but all costs, including the cost of slowing up on Jansen stage one, that's included, for sure.

Okay, great, thanks and then, just on Vandita, when you're thinking about the overall CapEx, you've mentioned that you've carved out some of the later stage infrastructure, items including Dsail.

Do you have any rough numbers that go along with that, when you've worked out the approximate operating costs within the study? And then the second part of that is, have you had any early stage, interest or discussions on, in terms of taking that on by the other partners?

Yeah, so on, infrastructure we haven't given any details on that yet and as you can see that is aligned with Stage 3, so it's quite a way way forward and in fact for Stage 3 CapEx, as you can appreciate, there is more optimization to be done as well. So early days, but in terms of infrastructure per se, nothing specific, but there is a lot of. Interest in in assets of these kinds in our industry. So at the right time we'll look at that and sharpen the economics as we go along. I think it's important to say that on Viunia, very excited about it, but look at Stage 1, Phase 1 $7 billion to $8 billion that we have given as a higher confidence level number. And of course the rest of the CapEx plan yet to be optimized given the timing of it.

Great, thank you.

Dominic O'Kane, JP Morgan.

Hello, two questions for me. You're just on the Cunia and the CapEx spend. Can you, so can you confirm for us if the CapEx numbers are obviously equity accounted? Should we assume that your proportional share of net debt will be, not included within your $10 billion to $20 billion dollar net debt range? Will it be essentially off balance sheet?

That that's right, Dominique. And the point that I made earlier was that in the same vein, we account for everything associated with Escondida, notwithstanding the fact that, a good portion of that is carried by others at the end of the day.

Okay, excellent. And then a follow on question just as you as you advance in your, understanding of the projects and your scope of the projects with Lundin, could again, could you just maybe give us a sense about how you know how you how BHP is considering the.

The management of that JV, i.e., in a sense of like risk mitigation and experiences that you've learned on projects like Jansen where you have had cost overruns and some more challenging, events. Can you just maybe give us a sense about how you're approaching the management of that joint venture?

Look, I, I'm sure granted you'll have comments on this as well, but this is truly a partnership where we've got. All of BHP's experiences, positive and negative, and our capability being brought to bear with exactly the same thing in a very positive attitude from the Lundins.

So we get the best of both worlds, they've got a lot of projects experience, including in some, tougher jurisdictions, and have had, this very strong track record of executing most projects. On time and on budget like we have, but they've had their own lessons around, seeing excursions to that just like we have a chance in. And so we're able to combine the learnings from both into this, and we're getting the best people on the ground to execute this project both by way of JV management. As well as the in terms of the actual project management.

And the planning is advanced enough, of course, engineering work is continuing, as you would expect in terms of its maturity, that EPCM contractors and local contractors are already in the tent as well, providing both their expertise and capability to the project. So as Mike said, joint.

Itself has good people who have been contributed from both ends with the deeper project knowledge as well as BHP and Lundins and then EPCM contractors and local contractors already working through as the joint venture continues to mature its engineering and other design factors for phase one.

(Operator Instruction)

Matt Green, Goldman Sachs.

Taking my follow-up, that I could just. You commented on, obviously infrastructure sales and not wanting to cede control, which I think has been the narrative for a long time, and, but if we look at your purple power deal, I think it's quite an interesting where you've structured that around a, I guess a synthetic type PPA where you don't change any of your control, and it's obviously set for a limited time.

Structures like that actually. Does it allow you to maybe re-explore. Similar sort of structures around some of your core infrastructure that perhaps have been off the cards in the past?

So I wouldn't rule things in and out at this stage, Matt. What I would say is there are many infrastructure related even before we come to very core assets available there, which have an asset class of their own in infrastructure. Now. Power is one of those, water is one of those, diesel is another one of those, roads are. So there is. Plethora of assets we want to choose the assets which have best chance of unlocking value and with that certainty that you mentioned and I mentioned which is around no strategic and operational control, but the list is such that we will choose the right ones and has to be at the right value. That is very important as well.

Myles Allsop, UBS.

Great, thank you. Just a couple of follow-up ones. First of all, this Escondida, you've done a great job kind of in terms of improving that medium term profile. Are we done, or do you think there is, are we done, or do you think there is potential to see another lift to that medium term profile?

So we are never tons of miles. It's, like, and genuinely, the team is constantly hunting for more opportunities. Now, obviously with the, an uplift of the size that we've seen between initially filling that dip and then the upgrade to, guidance, I wouldn't want to be backing our, or even as optimistic and as aggressive as Vanita and I are. I wouldn't want to back us to continue with that. But we will continue to optimize, and it can be on the cost front. It can be on the production front, the CapEx front.

This is a day in, day out effort, I think, probably the safe thing to to assume is that this is the forward plan for for Escondida, but we apply the same capabilities into Spence, for for example. So Spence is lagging Escondida in terms of The maturity of the BHP operating system application there and then taking some of the learnings out of Escondida and the use of reagents and so on to improve recoveries we want to see what we we're, we, we're we're encouraging the spins team to accelerate on that front as as well.

Okay, and maybe just, there's a few articles on Samarco and a bit of noise. I think you've changed the lawyers. Could you do a quick update on the UK, class action and, what we should expect? Is it fully provided or is there a further liability on the other side?

Oh no, so we've, we, we've provided it as best we can estimate at this point in time, and we did that after having, lost the liability, trial or the substantial part of the liability trial. But of course, we went back to the same judge, sought appeal there, that was declined. However, there were some important decisions made there, which was including the removal of those who've provided waivers, having received compensation in Brazil. So that will result in roughly 30%-40% that data coming out of the UK claim. We're now pursuing, we're taking that up to the Court of Appeals to seek leave there.

Now, overall, there's still a number of stages of trial to go through here and, any cash outflow here would still be a ways off in the in in the future. But if we come back to Samarco's been doing everything you would expect Samarco to be to be doing locally to ensure people have received appropriate compensation for what was a tragedy. We've remediated the environmental impacts and importantly, there was a very large, very complex agreement reached in Brazil with Brazilian stakeholders and signed off by the Brazilian government. So, it seems wholly sensible and defensible to say that that's the appropriate jurisdiction for compensation to be sought and and received.

Thank you. Okay, well, look, thank you everybody for joining this evening. Really do appreciate your interest. I hope that you can see that the company is, performing well. Another period of strong underlying operational results, tight cost control.

We've put more detail behind the growth plans that we have, both in terms of capital intensities as well as CAGR over the coming period. And we hope that that's a pretty compelling story. You can see in our operational and financial delivery, the discipline that we have behind these things, and that's going to help us to unlock this growth. And over the coming 3,4, 5 years, you're really going to see that take shape. Again, thank you for joining. Thank you.

Ladies and gentlemen, thank you for your interest. You may all disconnect.