BHP and Mineral Resources: Two ASX Mining Stocks, Two Different Bets

BHP Group Ltd (ASX:BHP) has held its ground better than most in the mining selloff. The stock sits about 10% below its 52-week high. The gap is narrower than Rio Tinto or Fortescue, both of which have given back more of their 2025 gains. For BHP's latest price and fundamentals, see its stock page.

The ASX mining sector has been under pressure as commodity prices softened in early 2026. Iron ore fell below $100 a tonne in February before recovering. Lithium carbonate prices in China have stabilised around $12,000 a tonne after a 2024 rout.

The difference between BHP and MinRes comes down to product mix. BHP's iron ore is higher-grade than Fortescue's. That means it commands a smaller discount when Chinese steel mills cut output. BHP also has copper, which has held up better than iron ore on the year. That dual exposure softens the blow when one commodity weakens. BHP's copper business, centred on Escondida in Chile, benefits from tight supply and rising demand from electrification. That adds a growth leg that iron ore alone cannot provide.

Mineral Resources Ltd (ASX:MIN) tells a different story. Its shares jumped 12% since the start of 2025. The move looks more like a catch-up trade than a structural re-rating. MinRes is heavily exposed to lithium through its Mt Marion and Wodgina operations. Lithium prices have been grinding higher after a brutal 2024. The question is whether that recovery has legs.

Lithium demand from Chinese battery makers has picked up. Supply is still coming online faster than many analysts expected. MinRes's own production guidance for 2026 suggests it is betting on volume over price discipline. That works if demand accelerates. It hurts if the market stays oversupplied. MinRes also runs an iron ore business through its Utah Point port facility. That operation is smaller and less profitable than its lithium operations.

BHP faces a different set of risks. Iron ore demand from China's property sector is structurally lower than it was five years ago. Steel output cuts are becoming a regular policy tool. BHP's cost position is among the best in the industry. Its Pilbara operations produce at roughly $18 a tonne. That is well below the marginal cost of smaller Australian and Brazilian producers. The margin of safety means BHP can keep generating cash even when iron ore falls into the $80s. The biggest risk for BHP is a deeper slowdown in China that cuts steel output further. That would hit iron ore demand and compress margins despite BHP's cost advantage.

The bigger question for both stocks is China's stimulus trajectory, a key theme in our commodities analysis. Beijing has signalled more fiscal support for infrastructure and manufacturing. That would boost steel demand. The property market remains in a deflationary spiral. That is where the bulk of iron ore consumption used to live. A stimulus package that targets factories over housing helps BHP's copper more than its iron ore.

For MinRes, the catalyst is simpler. Lithium prices need to hold above $12,000 a tonne for its expansions to make sense. The spot price is near that level now. A slip below $10,000 would put pressure on the balance sheet. The capital tied up in the Kemerton and Mt Marion expansions is significant. For MinRes, the risk is that lithium supply from new projects in Africa and South America keeps the market oversupplied. That would keep prices below $12,000 and pressure the balance sheet.

BHP's Alpha Score sits at 66 out of 100, a Moderate rating that reflects its diversified commodity base and low-cost position. The score would improve if copper prices rally further or if China announces a larger-than-expected stimulus package.

Neither stock is a screaming buy at current levels. BHP offers a margin of safety that MinRes does not. The lithium recovery is real yet unconfirmed. The iron ore decline is real, yet BHP has the cost structure to ride it out. That asymmetry is the reason BHP trades at a premium to MinRes on most valuation multiples. BHP trades at about 10 times forward earnings. MinRes trades at 15 times. The premium for MinRes assumes the lithium recovery continues.