Shares of BHP Group surged 3.5% to A$67.45 after the mining giant's FY2026 results revealed copper has officially overtaken iron ore as its largest earnings engine, a milestone that reframes how investors should value the company. BHP's Copper Pivot Hits a Milestone — But Can the Miner Grow What It Digs Today?
Shares of BHP Group climbed 3.5% to A$67.45, extending a week-long rally after FY2026 results confirmed a historic shift: copper now contributes 54% of group earnings, generating more than US$18 billion in EBITDA and surpassing iron ore as the company's primary earnings engine. The question facing shareholders is whether today's copper windfall — heavily driven by price — can translate into sustained volume growth when production is actually set to shrink next year.
Copper Prices Did the Heavy Lifting, Not More Metal in the Ground
Copper revenue jumped US$6.5 billion to US$29.0 billion, and underlying EBITDA for the copper segment rose US$5.9 billion to US$18.2 billion, with higher prices the primary driver.
Average realized copper prices surged roughly 35% year-on-year to around US$5.74 per pound. But output actually fell: total copper production decreased 3% to 1,953 kilotonnes. The earnings story is a copper price story — a distinction investors should not blur.
Next Year's Output Drops, and Geology Explains Why
BHP guided FY2027 copper production to 1,650,000–1,800,000 tonnes, down from 1,952,800 in FY26.
The decline is driven primarily by lower ore grades at Escondida in Chile, where concentrator feed grade is expected to fall to around 0.70% from 0.90%. Management targets a 50% copper production increase by the mid-2030s, outlining a self-funded growth pathway , but the near-term production dip means earnings will lean even harder on prices holding up.
Zambia Is a Long-Term Bet, Not a Near-Term Fix
BHP is weighing a major copper exploration push in Zambia, which would mark the miner's first large-scale project in Africa for more than a decade.
BHP has largely stayed out of Africa since spinning off South32 in 2015; its only significant foray since was Tanzania's Kabanga nickel project, which it exited last year. Exploration is early-stage by definition — any Zambian mine is years away from producing a single tonne.
Shareholders Got Paid, but Should Watch the Balance Sheet
BHP declared total FY2026 dividends of US$8.7 billion, its highest annual payout in four years.
Net debt fell below US$9 billion , well under the US$10–12 billion target. The CFO projected around US$50 billion in free cash flow over five years at current prices — a bold forecast that only holds if copper stays elevated. With output falling and exploration spending rising, the margin of safety narrows if prices soften.