BHP Group, a prominent mining company, has announced its full-year financial results for the fiscal year ending June 30, 2024. Despite facing a challenging macroeconomic environment marked by global uncertainties, BHP delivered a solid performance. The company reported an underlying attributable profit of $13.7 billion, reflecting a 2% year-over-year increase.
BHP’s CEO, Mike Henry, acknowledged the volatility in global commodity markets, particularly citing the uneven recovery in China, a major consumer of iron ore, one of BHP’s key revenue sources. The slowdown in China’s economy, especially its struggling property market, has impacted demand for iron ore.
As a result of these economic pressures, BHP slightly reduced its dividend payout for the period to 74 cents per share, down from 80 cents the previous year. Nevertheless, the company maintained its profitability, outperforming competitors like Vale, whose second-quarter results were negatively affected by higher expenses.
BHP’s CEO expressed cautious optimism about the future outlook of the global economy. He anticipated that developed economies would experience gradual relief from the lingering effects of higher interest rates in the coming years.
Looking ahead, BHP has been strategically focusing on copper as a key driver of growth. Recognizing the rising demand for copper, a vital component for the transition to green technology, BHP has outlined ambitious plans to expand its copper production. The company has a clear path to achieve well over two million tons of copper production per year.
BHP’s copper production has already seen impressive growth, increasing by 9% for the second consecutive year, reaching 1.9 million tons in FY 2024. The company’s strategy to enhance copper production involves expanding operations in both Australia and South America. In South Australia, BHP aims to significantly increase production to 650,000 tons per year by the mid-2030s, up from its current annual output of 310,000 to 340,000 tons.
Furthermore, BHP has made strategic acquisitions, including a 50% stake in Argentina’s Filo del Sol and Josemaria copper projects. These projects represent some of the most promising copper discoveries in recent years. Their development will be critical in addressing the anticipated 70% surge in global copper demand by 2050.
Despite short-term hurdles, such as the recent strike at the Escondida mine, BHP’s strong portfolio and proven managerial expertise position the company to capitalize on the positive trends within the industry.
