BHP Group: Between the Copper Boom and Billions in Legacy Liabilities
The copper division has become the key value driver. In the first half of fiscal year 2026, the division contributed over half of the Group’s EBITDA—a significant increase from 39% in the prior year. At 66%, the EBITDA margin in the copper business even exceeded that of the traditional iron ore business. BHP has raised its full-year production forecast to 1.9 to 2.0 million metric tonnes. Demand from China remains resilient, while India is gaining importance as an additional driver. However, price trends remain fragile, and analysts expect a sideways movement around USD 6.10 per pound.
The recent announcement of an unscheduled impairment charge of approximately USD 2.3 billion for the Jansen Stage 2 project in Saskatchewan caused uncertainty. Capital expenditures for the second phase rose to USD 6.9 billion; the original estimate had been USD 4.9 billion. Phase 2 is only 16% complete, and the start of production has been pushed back to fiscal year 2031. Phase 1 remains on track, with production scheduled to begin in mid-2027. The internal rate of return for the entire project was revised to 11%. Investors reacted to the news with the sharpest one-day loss in 14 months—a sign that even long-term shareholders are taking a critical look at the cost developments.
Brandon Craig, who has been with the company for more than 25 years, is succeeding Mike Henry. He has already initiated the first personnel changes. Effective July 1, the position of President of the Americas will be split into the positions of President of North America and President of South America. Jessica Farrell will take over North America, while Geraldine Slattery will remain President of Australia and will also be responsible for Copper South Australia going forward. At the same time, BHP is exploring the sale of power transmission lines in Chile valued at approximately USD 1.5 billion to free up funds for its copper business. The next milestones for investors are the Operational Review on July 16 and the final financial results on August 18—both of which will show whether the company’s operational strength can offset the project-related burdens. The stock is currently trading at around EUR 36.00.
Power Metallic Mines: With a copper discovery that sets new standards
Power Metallic Mines’ latest drill results from June 23 underscore the exceptional nature of the Lion Zone at the NISK project. Hole PML 26 115 intersected 13.30 m at 3.98% copper equivalent (CuEq), while Hole PML 26 105 returned 5.26 m at 8.45% CuEq. This is significantly above the global mining average of approximately 0.4%. According to the company, this is the first orthomagmatic discovery of this magnitude since the Sakatti Fund in Finland in 2006. These are extremely rare polymetallic deposits that can also be effectively mined at NISK. SGS tests confirm high recovery rates for copper, platinum group metals, and other precious metals. This significantly reduces metallurgical risks.
Economically, the location in the James Bay region plays a major role. There is a year-round access road, an electricity connection, and an airport, all of which help reduce infrastructure costs. Québec’s tax system offers strong incentives. Exploration expenditures are tax-deductible, and during mine development, federal and provincial tax credits can offset a significant portion of the investment burden. The management team combines technical expertise with political connections. Stephen Beresford, a director (formerly with First Quantum), and Seamus O’Regan, a director (former federal minister), serve on the Board of Directors. In the private placement on June 10, Power Metallic raised CAD 28,228,750. Eric Sprott placed a lead order of CAD 2,000,000, thereby securing 1.6 million shares. This placement signals support from a significant investor.
The surveys (SQUID, gravimetry, ANT) launched on May 27 aim to map deeper structures and locate the original magmatic body. Management notes that many magmatic systems in the region have historically been developed into major mining districts. The ongoing 100,000 m drilling campaign is providing the data for a mineral resource estimate, which is expected toward the end of July, followed by a Preliminary Economic Assessment (PEA). At the same time, the company is pursuing a listing on the NASDAQ. Compared to previous billion-level transactions, the current market capitalization of approximately CAD 255 million appears moderate. The stock is currently trading at around CAD 1.13.
Freeport-McMoRan: Facing a Production Bottleneck
The copper producer was forced to unexpectedly revise its production forecast downward for the current year after technical problems at the Grasberg open-pit mine in Indonesia worsened. Due to water ingress, the moisture content of the mined material has increased to 45%, significantly limiting processing capacity. The solution approved by regulatory authorities involves smart control systems at the material discharge points, but their installation will take time. Nevertheless, management is sticking to its dividend policy, and the quarterly cash dividend of USD 0.15 per share will be paid as scheduled.
The medium-term outlook paints a different picture. Several expansion projects are underway in Arizona and Chile, building on existing facilities. The Bagdad project could increase annual production by up to 250 million pounds, while even greater potential lies dormant at El Abra. The innovative leaching technology appears particularly promising; it is designed to extract additional copper from existing tailings—with a comparatively low capital investment. The company is targeting annual production of 800 million pounds here by 2030.
The fundamental conditions remain intact. The copper price continues to trade at high levels, driven by the wave of electrification and the expansion of digital infrastructure. The global supply gap for copper concentrate is likely to widen further in the long term. Freeport-McMoRan is well-positioned, with its geographic diversification and internal growth opportunities, to benefit from this trend. The temporary decline in Indonesia’s production is partially offset by robust US operations. Analysts consider the stock fairly valued relative to industry leader Southern Copper. The share price is currently trading at around USD 62.89.
Copper remains the key commodity for electrification and offers opportunities for investors. As an established giant, BHP Group is grappling with cost overruns in the billions at the Jansen project, while its copper operations are delivering record margins. Power Metallic Mines is setting the bar with strong drill results and an active exploration campaign; the recent sell-off appears excessive. Freeport-McMoRan may have to contend with a production bottleneck in Indonesia, but it remains a direct sector play thanks to expansion projects and high copper prices.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a “Transaction”). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
In this respect, there is a concrete conflict of interest in the reporting on the companies.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is also a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
