BHP posted record $32.9B EBITDA as copper overtook iron ore for the first time. A $2.3B Jansen writedown and $1.1B Samarco charge tempered the result. New CEO Brandon Craig inherits decisions on potash costs and nickel.
BHP Group (BHP) posted a record underlying EBITDA of $32.9 billion for the year to June 30, 2026, up 27%. The headline number is the best in the company's history. The footnote is a $2.3 billion writedown on the unfinished Jansen potash project in Canada. A further $1.1 billion charge tied to the 2015 Samarco dam disaster also hit the books.
Revenue rose 15% to $58.8 billion. The underlying EBITDA margin hit 59%, the highest in four years and a level more typical of software companies than miners. Free cash flow nearly doubled to $9.8 billion, up 83%. The final dividend of 99 US cents brings the full-year payout to 172 US cents, the highest in four years. Total returns to shareholders over the past decade exceed $115 billion, BHP said.
Underlying return on capital employed climbed to 26.1% from 20.6%. Net debt fell to $8.7 billion, well below the bottom of BHP's published target range of $10 billion to $20 billion.
For the first time in the company's history, copper passed iron ore as the biggest profit driver. Copper contributed 54% of group EBITDA, or $18.2 billion, up 48%. The shift reflects soaring prices – copper averaged $5.74 a pound, up 35% year-on-year – and lower costs. Escondida, BHP's crown jewel copper mine in Chile, cut unit costs 10%. Copper South Australia slashed unit costs by 73%.
Copper production actually fell 3% to 1,953 kilotonnes. The extra billions came from the market, not the mine. BHP's own language about "operational excellence" tells only part of the story; most of the copper gains were a gift from the global price cycle.
Iron ore, the business that built BHP, stood still. Western Australian production was flat at 257 million tonnes. Unit costs rose 6% to $19.66 a tonne, driven by a stronger Australian dollar and higher diesel prices. EBITDA from iron ore was flat. Copper didn't overtake iron ore because it suddenly got bigger. It overtook the long-time stalwart because iron ore stalled.
BHP spent much of 2024 chasing a near $50 billion takeover of Anglo American, largely to get its hands on Anglo's Chilean and Peruvian copper assets. The deal collapsed when Anglo's board rejected the offer. Two years on, BHP has grown its way to a copper-dominant earnings mix organically – without the takeover premium and without having to digest Anglo's platinum and De Beers baggage. Anglo shareholders, many of them South African, are left to wonder whether they dodged a bullet or missed a payday. For more on the company's strategic path, see BHP and Mineral Resources: Two ASX Mining Stocks, Two Different Bets.
Exceptional charges totaled $3.4 billion this year, the gap between the $13.2 billion underlying profit and the $9.8 billion actually attributable to shareholders. The Jansen potash project accounted for $2.3 billion of that. Stage 2's investment estimate blew out from $4.9 billion to $6.9 billion – a 41% increase – on cost inflation. Stage 1 is 84% complete and still on schedule for mid-2027, BHP said. The project has not produced a single tonne of potash.
The Samarco provision now sits at $5.2 billion. Total compensation paid since the 2015 Fundão dam collapse in Brazil has reached $17.3 billion. Some liabilities never really close.
These results are the last under outgoing CEO Mike Henry. His successor, Brandon Craig, took over on July 1. Craig, a South African educated at the University of KwaZulu-Natal and Unisa, faces immediate decisions. A decision on the mothballed Western Australia nickel business is due by February 2027. Jansen's costs need to be contained. The net debt position, already below the target range, opens questions about capital allocation. With Anglo American now out of the picture, BHP no longer has an obvious target for its idle firepower.
Days after the financial year ended, a contractor died at BMA's Peak Downs mine in Queensland. The annual report noted the tragedy, a sobering reminder of the risks that accompany record profits.
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