BHP’s profits surged by 30%, with its copper business surpassing iron ore for the first time as the largest source of profit.

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BHP, the world's largest mining company by market value, has reaped the rewards of betting on a surge in copper demand, with net profit rising nearly 30% year-on-year in the first half of its fiscal year, and its copper business becoming the company’s largest profit contributor for the first time.

The Australian mining giant announced on Tuesday that, for the six months ended December 31 last year, revenue rose 11% year-on-year to $27.9 billion, and profits attributable to shareholders increased 28% to $5.6 billion. The results surpassed analysts’ expectations, and the company's stock opened up 5.3%.

CEO Mike Henry called the results a "milestone" for BHP, noting that the copper business contributed 51% of the company's underlying EBITDA, surpassing other business segments for the first time to become the largest profit source. Strong demand from the energy and automotive industries continues to push copper prices higher, validating the strategic value of this transformation.

BHP will pay an interim dividend of 73 cents per share, equivalent to a 60% payout ratio.

Copper Business Surges as Profit Pillar

Copper has become the core driver of growth for global mining companies. BHP’s latest results mark the success of the company’s strategic transformation, with copper’s contribution to underlying EBITDA reaching 51%, making it the largest profit source for the first time.

Saranga Ranasinghe from Moody’s Ratings said copper has now become a “strong profit pillar” for BHP. She noted that BHP raised its copper production guidance amid decreasing market supply, which will support stronger future cash flows as higher output coincides with tighter market conditions.

BHP last month raised its copper production growth forecast, targeting annual output of 2.5 million tons by the mid-2030s. Henry said multiple projects are "adding substantial content" to this goal.

Abandoning Large Acquisitions for Small-Scale Deals

Expanding the copper business was once a core strategy for BHP. The company attempted to merge with Anglo American late last year but was unsuccessful. A similar logic drove the recent negotiations between Rio Tinto and Glencore, which also ended without a deal.

However, Henry said in a media conference call that BHP currently feels "no urgent need" to seek further acquisition opportunities. He noted that deals aligning with the company’s growth strategy are limited in scope.

Having abandoned large mergers and acquisitions, BHP has maintained its position as the world’s largest copper producer through smaller transactions, including the acquisition of Australia's OZ Minerals and Chile's Vicuña project. Canada’s Lundin Mining said this week its jointly owned Vicuña project with BHP is progressing rapidly, with initial development slated to invest $7.1 billion.

BHP also benefited from a surge in prices of copper mining by-products, including gold, silver, and uranium. These non-core products contributed around $2 billion in revenue in the first half.

The company has signed a $4.3 billion deal with Canada's Wheaton Precious Metals to supply silver from the Antamina mine in Peru, capitalizing on the sharp rise in metal prices.

This deal is part of BHP's asset optimization plan. In December last year, the company sold its stake in Western Australia's power network to Global Infrastructure Partners for $2 billion, as part of its plan to unlock $10 billion of undervalued assets within its business.

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