BHP Group has reported a stronger-than-expected half-year profit, with copper surpassing iron ore as the world’s largest miner’s biggest earnings contributor for the first time, driven by artificial intelligence-fuelled demand for the metal, said Reuters on Tuesday.
First-half underlying attributable profit rose 22% to $6.20bn, beating analyst consensus of $6.03bn. BHP declared an interim dividend of 73 cents per share, well ahead of market expectations of 63 cents, sending shares up 7% to an all-time high.
“It was a good result,” Andy Forster, portfolio manager at Argo Investments, a BHP shareholder told Reuters. “They smashed everyone’s expectations from a dividend perspective.”
Copper, including by-products such as gold, contributed $7.95bn to operating earnings in the six months to December 31, edging ahead of iron ore’s $7.50bn and accounting for 51% of total underlying operating earnings of $15.46bn. Realised copper prices jumped 32% over the period.
Rapid growth in power consumption at artificial intelligence data centres, alongside the broader transition to cleaner energy, has intensified competition among mining majors for high-quality copper assets. BHP said its organic growth pipeline reduced any urgency to pursue acquisitions, having abandoned an approach for Anglo American last year.
CEO Mike Henry said the company did not feel pressure to pursue mergers and acquisitions. “For the discrete few opportunities that might come along that fit the very strict criteria that we have, we’ve got the wherewithal to pursue them, but we’re not feeling any burning need to,” he said.
BHP flagged its previously announced copper, gold and silver prospect in Argentina held in Vicuna Corp, a joint venture with Lundin Mining. The unit could produce more than 500,000 tons of copper annually at peak output next decade with investment extending to $18bn.
The miner also agreed a silver streaming deal with Wheaton Precious Metals worth $4.3bn, part of a targeted $10bn to be raised from existing assets.
“In the last five years, Mike has set the business up with options,” Glyn Lawcock, head of metals and mining research at Barrenjoey Markets Pty in Sydney told Bloomberg News. “Clearly, growth to 2030 is really potash and iron ore, but you hit the start of the new decade, it’s pretty much all copper,” he said.