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BHP Advances Copper Strategy: Can It Unlock Bigger Returns?
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Key Takeaways
BHP is prioritizing copper and potash, allocating ~70% of capex to these growth-focused segments.
BHP copper output rose 30% in four years, with 1.9-2.0M tons targeted for fiscal 2026.
BHP advances Escondida project and Resolution Copper JV to support long-term production growth.
BHP Group Limited (BHP - Free Report) is reshaping its growth strategy around commodities with durable, long-term demand. Copper sits at the core of this shift, while potash is emerging as a complementary pillar that can diversify earnings over time.
The company plans to allocate roughly 70% of its medium-term capital expenditure to these two segments, aligning its portfolio with structural themes such as electrification, decarbonization, population growth and rising living standards in emerging markets. Notably, in fiscal 2025, capital and exploration spending totaled $9.8 billion, which included a $4.5 billion on copper, $1.6 billion in potash and $3.2 billion in steelmaking materials.
Backed by its efforts, BHP has delivered strong momentum, with copper production rising 30% over the past four years. The company expects copper output in the range of 1.9–2.0 million tons in fiscal 2026.
BHP recently submitted the “Escondida New Concentrator” project to the Environmental Assessment System, a step that supports its growth agenda while addressing asset longevity. The new concentrator is designed to replace the historic Los Colorados plant as it approaches the end of its operating life. The project carries a likely investment range of $4.4-$5.9 billion and targets new capacity to produce 220-260 kt of copper annually. If advanced on schedule, that single project can represent a meaningful increment within BHP’s broader copper buildout.
BHP’s pipeline also includes exposure to U.S. copper through Resolution Copper, a joint venture owned by BHP (45%) and Rio Tinto (RIO - Free Report) (55%). The project, located in Arizona, is positioned as one of the most significant undeveloped copper resources in the United States.
BHP’s longer-range ambition is to deliver around 2 million tons per annum of attributable copper production by the 2030s. The goal reflects a pipeline that includes projects already under execution and additional opportunities in development.
Among peers, Southern Copper Corporation (SCCO - Free Report) produced 956,270 tons of copper in 2025. The company guides copper production at around 911,400 tons. Southern Copper maintains a strong long-term outlook, targeting a significant ramp-up in output to roughly 1.6 million tons by 2035. This implies a compound annual growth rate (CAGR) of approximately 5.3% from 2025 levels. Key growth catalysts include the Tía María, Los Chancas and Michiquillay projects in Peru, along with El Pilar and El Arco in Mexico, all of which underpin SCCO’s long-term expansion pipeline. To support this growth plan, Southern Copper intends to invest nearly $19.9 billion over the next decade.
Copper is also a major pillar for Rio Tinto’s long-term growth strategy. Rio Tinto’s total copper production reached 883 kt in 2025, up 11% on a year-over-year basis. Rio Tinto expects copper production in the range of 800-870 kt for 2026. The company remains on track to deliver on its 3% CAGR copper production target over 2024-2033.
BHP’s Price Performance, Valuation & Estimates
BHP shares have gained 68.7% in the past year compared with the industry’s 56.1% growth.
Image Source: Zacks Investment Research
BHP is trading at a forward 12-month price/sales multiple of 3.67X, higher than the industry’s 1.60X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BHP’s fiscal 2026 earnings is pegged at $4.95 per share, suggesting 36% year-over-year growth. The same for fiscal 2027 indicates a decline of 0.6%.
Here is how the EPS estimates for fiscal 2026 and 2027 have been revised over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
BHP Advances Copper Strategy: Can It Unlock Bigger Returns?
Key Takeaways
BHP Group Limited (BHP - Free Report) is reshaping its growth strategy around commodities with durable, long-term demand. Copper sits at the core of this shift, while potash is emerging as a complementary pillar that can diversify earnings over time.
The company plans to allocate roughly 70% of its medium-term capital expenditure to these two segments, aligning its portfolio with structural themes such as electrification, decarbonization, population growth and rising living standards in emerging markets. Notably, in fiscal 2025, capital and exploration spending totaled $9.8 billion, which included a $4.5 billion on copper, $1.6 billion in potash and $3.2 billion in steelmaking materials.
Backed by its efforts, BHP has delivered strong momentum, with copper production rising 30% over the past four years. The company expects copper output in the range of 1.9–2.0 million tons in fiscal 2026.
BHP recently submitted the “Escondida New Concentrator” project to the Environmental Assessment System, a step that supports its growth agenda while addressing asset longevity. The new concentrator is designed to replace the historic Los Colorados plant as it approaches the end of its operating life. The project carries a likely investment range of $4.4-$5.9 billion and targets new capacity to produce 220-260 kt of copper annually. If advanced on schedule, that single project can represent a meaningful increment within BHP’s broader copper buildout.
BHP’s pipeline also includes exposure to U.S. copper through Resolution Copper, a joint venture owned by BHP (45%) and Rio Tinto (RIO - Free Report) (55%). The project, located in Arizona, is positioned as one of the most significant undeveloped copper resources in the United States.
BHP’s longer-range ambition is to deliver around 2 million tons per annum of attributable copper production by the 2030s. The goal reflects a pipeline that includes projects already under execution and additional opportunities in development.
Among peers, Southern Copper Corporation (SCCO - Free Report) produced 956,270 tons of copper in 2025. The company guides copper production at around 911,400 tons. Southern Copper maintains a strong long-term outlook, targeting a significant ramp-up in output to roughly 1.6 million tons by 2035. This implies a compound annual growth rate (CAGR) of approximately 5.3% from 2025 levels. Key growth catalysts include the Tía María, Los Chancas and Michiquillay projects in Peru, along with El Pilar and El Arco in Mexico, all of which underpin SCCO’s long-term expansion pipeline. To support this growth plan, Southern Copper intends to invest nearly $19.9 billion over the next decade.
Copper is also a major pillar for Rio Tinto’s long-term growth strategy. Rio Tinto’s total copper production reached 883 kt in 2025, up 11% on a year-over-year basis. Rio Tinto expects copper production in the range of 800-870 kt for 2026. The company remains on track to deliver on its 3% CAGR copper production target over 2024-2033.
BHP’s Price Performance, Valuation & Estimates
BHP shares have gained 68.7% in the past year compared with the industry’s 56.1% growth.
Image Source: Zacks Investment Research
BHP is trading at a forward 12-month price/sales multiple of 3.67X, higher than the industry’s 1.60X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BHP’s fiscal 2026 earnings is pegged at $4.95 per share, suggesting 36% year-over-year growth. The same for fiscal 2027 indicates a decline of 0.6%.
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.