BHP Group: On the Path to Becoming a Copper Producer
BHP Group’s latest financial results reveal a significant shift within the company. In the first half of 2025/2026, that is, from July through December 2025, the copper business, including by-product gold, generated an operating profit of approximately USD 8 billion, surpassing the iron ore segment’s contribution for the first time. As a result, the red metal accounted for 51% of total earnings. The new CEO, Brandon Craig, who has been at the helm since July 2026, will continue to pursue this course. In this way, the company is slowly but surely breaking free from its dependence on China in the steel market and positioning itself for the megatrend of electrification.
Iron ore production reached a new high of 264.7 million metric tons, an increase of 1%. Operations at Western Australia Iron Ore (WAIO) produced an even higher 291.2 million metric tons, although BHP does not hold a full stake in these operations. At the same time, copper production there fell by 3% to 1.953 million metric tons, primarily due to lower ore grades at Escondida, the world’s largest copper mine. For the upcoming fiscal year, BHP expects a significant decline in production to between 1.65 million and 1.80 million metric tons, while iron ore production is expected to remain stable.
Despite these temporary declines in production, the company continues to invest heavily in expanding its copper capacity. The Vicuña project in Argentina received the RIGI permit, which establishes the tax framework for the next 40 years. The restart of Cerro Colorado and the stake in Faraday Copper demonstrate how serious the company is about increasing copper production. The Jansen project in Canada also opens up a new pillar of business in the potash production sector. However, this will initially result in an impairment charge of USD 2.3 billion, which will weigh on the balance sheet in the short term. The upcoming annual results will be published on August 18 and will clarify the company’s future direction.
Strategic Resources: Supporting Green Steel Production
The steel industry is transforming and shifting toward hydrogen-based direct reduction processes. Strategic Resources has positioned itself precisely in this niche. It is developing an integrated value chain for high-purity iron, vanadium, and titanium—the raw materials that are indispensable for the industry of tomorrow. At the heart of this is the fully permitted BlackRock project in Quebec. The feasibility study shows a net present value of CAD 1.9 billion, with an internal rate of return of 18.2%. The mine life is estimated at 39 years for the first deposit alone. Reserves total 127.8 million metric tonnes of ore with significant concentrations of vanadium, iron, and titanium. Annual production of 562,000 metric tonnes of high-purity pig iron, 4,400 metric tonnes of Fev80, and 118,000 metric tonnes of titanium slag targets precisely those markets that will experience strong growth in the wake of the energy transition. The infrastructure, including affordable energy, is in place. This provides cost advantages over existing pellet plants. A 400-km-long rail line connects the mine to the planned metallurgical complex at the deep-water port of Port Saguenay.
In addition to its Canadian flagship project, Strategic Resources owns the Mustavaara project in Finland. In June 2026, the company was accepted as a partner in the EUR 17 million FutSteel research project, which is developing hydrogen-based steel production in cooperation with the University of Oulu and SSAB. The company’s partnerships are wide-ranging. In April 2026, Strategic Resources signed a memorandum of understanding with Tyfast Energy to establish a Canadian vanadium-to-battery value chain for heavy-duty vehicles. The growing market for vanadium batteries offers additional potential.
The overall conditions are exceptionally favourable. Geopolitical tensions highlight the need to establish supply chains between North America and Europe. The Canadian government has provided CAD 111 million in funding for the Port of Saguenay, and the province of Quebec is itself a shareholder in Strategic Resources. In May 2026, the final responses were submitted to the Ministry of the Environment to increase the permit for the pellet plant from 1.5 million metric tonnes to 4 million metric tonnes. With the management team of Sean Cleary and Dan Nir, the company is well-positioned to compete in the fields of green steel and vanadium production and recycling.
Freeport McMoRan: Between Opportunities and Cost Pressure
Freeport-McMoRan exceeded analysts’ expectations in the second quarter. Adjusted earnings per share came in at USD 0.74, well above the expected USD 0.59. Revenue also exceeded forecasts at USD 7.03 billion, beating them by just under 5%. Nevertheless, the market reacted cautiously, and the stock declined following the earnings report. Yet the operational fundamentals remain solid. Higher copper prices, averaging UDS 6.17 per pound, supported revenues, while net cash costs of USD 1.97 per pound actually remained below the company’s own forecast. However, rising capital expenditures are weighing on the figures, particularly for the Baghdad project in Arizona. The estimated capital requirement now stands at around USD 4.5 billion, which is 30% above the original estimate.
In Indonesia, operational progress is being made. The production rate at the Grasberg block cave doubled over the course of the quarter, from 34,000 to 69,000 metric tons per day. According to management, capacity utilization is expected to be around 65% in the second half of the year. It is projected to reach 80% by mid-2027. Full capacity is planned for the end of 2027. The company expects copper sales to rise by about 20% in the second half of the year compared to the first half, while gold sales are projected to increase by as much as 65%. Management has confirmed the full-year forecast of 3.1 billion pounds of copper sales, even though the outlook for the third quarter was somewhat more subdued.
Analysts are largely positive on the stock. The average price target of around USD 72 implies upside potential. Goldman Sachs and BMO Capital reaffirmed their “Buy” ratings following the quarterly results. In the long term, the company is likely to benefit from global electrification. Over 65% of the copper produced is used in applications such as power grids, electric vehicles, and data centers. For 2027 and 2028, the company forecasts annual EBITDA of between USD 13 billion and USD 20 billion, depending on the copper price. Capital returns to shareholders are underway. In the first half of the year, USD 600 million was distributed to shareholders. At the same time, the company increased its stake in the Cerro Verde Mine in Peru to 55.66%.
The commodities supercycle is coming because nothing can be produced without raw materials. The BHP Group is completing its strategic transition from an iron ore giant to a copper giant and is repositioning itself. Strategic Resources is occupying a profitable niche of the future with vanadium and green steel. Freeport McMoRan is delivering solid results and will benefit from electrification in the long term.
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