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BHP Iron Ore Output Up 2% in 1H26: Can Expansion Drive Future Gains?
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Key Takeaways
BHP iron ore output rose 2% to 133.8 Mt in H1 FY26, with WAIO delivering a record 129.8 Mt.
BHP guides FY26 iron ore production at 258269 Mt, factoring CD3 renewal and RTP1 tie-in work.
BHP targets output above 305 Mt annually by FY28 while advancing the Western Ridge Crusher project.
BHP Group (BHP - Free Report) reported a 2% rise in iron ore output to 133.8 Mt in the first half of fiscal 2026 (ended Dec. 31, 2025), with Western Australia Iron Ore (WAIO) delivering a record 129.8 Mt, or 146.6 Mt on a 100% basis.
For fiscal 2026, BHP expects total iron ore production of 258–269 Mt, including 251–262 Mt from WAIO (284–296 Mt on a 100% basis). Guidance incorporates the Car Dumper 3 (CD3) renewal and ongoing tie-in work for Rail Technology Program 1 (RTP1). With this performance, the iron operations are already halfway through the targeted fiscal 2026 and poised to offset the impact of a typically wet third quarter.
BHP continues to be the lowest-cost major iron ore producer globally and is focused on extending this advantage at WAIO. It has executed several low-capital projects on time and within budget, including completing the CD3 renewal ahead of schedule in the first quarter of fiscal 2026. The Western Ridge Crusher project is progressing and remains on track for completion in the first quarter of 2027. The company is also investing in a sixth car dumper and associated infrastructure at Port Hedland.
Looking ahead, BHP aims to lift production to more than 305 Mt per annum (100% basis) by the end of fiscal 2028 and sustain that level over the medium term.
Vale S.A (VALE - Free Report) reported iron ore production for 2025 at around 336 Mt, up 2.6% year over year and above its latest guidance of 335 MT. Vale targets iron ore production capacity at 335-345 Mt in 2026, with plans to increase it to 360 Mt by 2030. Key projects supporting this expansion include Vargem Grande 1 (VGR1) and the Capanema Maximization project, each expected to add approximately 15 Mt per year of capacity. Additional initiatives, such as Compact Crushing at S11D and Serra Sul, are also expected to enhance capacity beginning in the second half of 2026.
Rio Tinto Group (RIO - Free Report) reported iron ore production at Pilbara (100%) at 327.3 Mt in 2025, flat year over year. Shipments totaled 326.2 Mt, down 1% year over year, coming near the lower end of the guidance of 323-338 Mt. Rio Tinto provides iron ore sales guidance for 2026 at 343-366 Mt, with Pilbara (100% basis) at 323-338 Mt.
BHP’s Price Performance, Valuation & Estimates
BHP shares have gained 38% in the past year compared with the industry’s 31% growth.
Image Source: Zacks Investment Research
BHP is trading at a forward 12-month price/sales multiple of 3.21X, higher than the industry’s 1.41X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BHP’s fiscal 2026 earnings is pegged at $2.10 per share, suggesting 15.4% year-over-year growth. The same for fiscal 2027 indicates growth of 2.3%.
Here is how the EPS estimates for fiscal 2026 and 2027 have been revised over the past 60 days.
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Image: Bigstock
BHP Iron Ore Output Up 2% in 1H26: Can Expansion Drive Future Gains?
Key Takeaways
BHP Group (BHP - Free Report) reported a 2% rise in iron ore output to 133.8 Mt in the first half of fiscal 2026 (ended Dec. 31, 2025), with Western Australia Iron Ore (WAIO) delivering a record 129.8 Mt, or 146.6 Mt on a 100% basis.
For fiscal 2026, BHP expects total iron ore production of 258–269 Mt, including 251–262 Mt from WAIO (284–296 Mt on a 100% basis). Guidance incorporates the Car Dumper 3 (CD3) renewal and ongoing tie-in work for Rail Technology Program 1 (RTP1). With this performance, the iron operations are already halfway through the targeted fiscal 2026 and poised to offset the impact of a typically wet third quarter.
BHP continues to be the lowest-cost major iron ore producer globally and is focused on extending this advantage at WAIO. It has executed several low-capital projects on time and within budget, including completing the CD3 renewal ahead of schedule in the first quarter of fiscal 2026. The Western Ridge Crusher project is progressing and remains on track for completion in the first quarter of 2027. The company is also investing in a sixth car dumper and associated infrastructure at Port Hedland.
Looking ahead, BHP aims to lift production to more than 305 Mt per annum (100% basis) by the end of fiscal 2028 and sustain that level over the medium term.
Vale S.A (VALE - Free Report) reported iron ore production for 2025 at around 336 Mt, up 2.6% year over year and above its latest guidance of 335 MT. Vale targets iron ore production capacity at 335-345 Mt in 2026, with plans to increase it to 360 Mt by 2030. Key projects supporting this expansion include Vargem Grande 1 (VGR1) and the Capanema Maximization project, each expected to add approximately 15 Mt per year of capacity. Additional initiatives, such as Compact Crushing at S11D and Serra Sul, are also expected to enhance capacity beginning in the second half of 2026.
Rio Tinto Group (RIO - Free Report) reported iron ore production at Pilbara (100%) at 327.3 Mt in 2025, flat year over year. Shipments totaled 326.2 Mt, down 1% year over year, coming near the lower end of the guidance of 323-338 Mt. Rio Tinto provides iron ore sales guidance for 2026 at 343-366 Mt, with Pilbara (100% basis) at 323-338 Mt.
BHP’s Price Performance, Valuation & Estimates
BHP shares have gained 38% in the past year compared with the industry’s 31% growth.
BHP is trading at a forward 12-month price/sales multiple of 3.21X, higher than the industry’s 1.41X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BHP’s fiscal 2026 earnings is pegged at $2.10 per share, suggesting 15.4% year-over-year growth. The same for fiscal 2027 indicates growth of 2.3%.
Here is how the EPS estimates for fiscal 2026 and 2027 have been revised over the past 60 days.
Image Source: Zacks Investment Research
BHP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.