BHP reported strong financial results for the half-year ending December 31, 2024. Demand for copper is rising due to renewables and electric vehicles (EVs). Thus, the company is focused on boosting copper production. Notably, BHP aims for sustainable mining that balances growth with environmental care and low emissions.
BHP Reports Strong Half-Year Financial Results
The financial report showcased strong margins and steady cash flow led to an interim dividend of 50 US cents per share, totaling $2.5 billion.
BHP Chief Executive Officer, Mike Henry explained,
“BHP reported a strong financial performance for the half-year, underpinned by safe and reliable operations and rigorous cost control. The Group’s industry-leading margins and robust cash flow enabled the Board to determine an interim dividend of 50 US cents per share – a total of US$2.5 billion. The strength of the result demonstrates BHP’s operational resilience and its ability to perform through the cycle, with standout production performances in the half from Escondida, WAIO and BMA. WAIO has maintained its lead as the lowest-cost iron ore producer globally, a testament to our ongoing work to drive productivity at our operations.”
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Production Performance: Escondida, Western Australia Iron Ore (WAIO), and BHP Mitsubishi Alliance (BMA) achieved high outputs. WAIO remains the world’s lowest-cost iron ore producer.
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Growth Investments: BHP invested $3.2 billion in potash and copper. It completed a $2.0 billion joint venture with Lundin Mining in Argentina.
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Financial Strength: Attributable profit reached $4.4 billion. Copper production rose by 10%. Revenue dropped by $2.0 billion due to lower iron ore and steelmaking coal prices.
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Capital and Exploration: Total spending reached $5.2 billion. This aimed at potash and copper for medium-term growth.
Market Outlook
Global commodity demand is strong despite economic uncertainties. China shows early signs of recovery, while the US and India continue to drive growth. BHP expects demand to grow due to several factors. These include population growth, urbanization, and the energy transition. Also, more AI and data center projects will boost demand for copper.
Global seaborne demand for iron ore fell slightly. China’s steel production stayed steady due to infrastructure and energy projects. This increased supply has raised stocks at Chinese ports.
Commodity Analysis
Copper
Production increased by 10% to 987 kt. The mean achieved rates rose by 9%. The market is tight due to supply issues. BHP expects annual copper demand to grow from 32 Mtpa to over 50 Mtpa by 2050. This growth is driven by infrastructure, renewable energy, and digital expansion.
Attractive internal options to grow in copper for value: organic projects benchmark well vs. current market valuations of listed copper producers
Iron Ore
Produced 131 Mt of while WAIO’s output remained strong at 128 Mt. The company retains its position as the lowest-cost major producer. Developing regions that are increasing steel production will drive long-term demand, requiring more investment to maintain supply.
2025 Strategy
BHP focuses on disciplined capital allocation and sustainable growth. Capital expenditure is set at $10 billion for FY25, rising to $11 billion annually in the medium term. Key growth projects include Jansen, Escondida, Copper South Australia, and WAIO.
Capital spent by commodity: Increasing growth spend with continued flexibility to adjust spend for value
BHP’s Roadmap to Cutting Carbon Emissions and Achieving Net Zero
The company has always aimed for better efficiency and invests in important commodities for the future. It also aims to cut greenhouse gas (GHG) emissions and has a clear strategy forward. Let’s see what its sustainability report reveals about its net zero plans.
Emissions Reductions
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Aims to cut Scopes 1 and 2 GHG emissions by at least 30% by 2030 from the 2020 baseline and become net zero by 2050.
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In 2024, operational emissions dropped by 32%, reaching 9.2 MtCO₂-e from the 2020 baseline. However, Scope 3 emissions, mainly from customer product use, were 377.0 MtCO₂-e.
Non-Reliance on Carbon Credits
BHP has a clear plan to cut emissions by 2030. They aim for real reductions instead of relying on carbon credits. The company commits to reducing operational GHG emissions through direct actions. Voluntary credits may be used for unexpected shortfalls.
They prioritize low-carbon infrastructure to cut emissions like new facilities and projects with cleaner technologies. The company also reviews acquisitions for their environmental impact, ensuring they stay on track with carbon reduction goals and long-term sustainability plans. Furthermore, they have a strict carbon budget for emissions reductions.
Roadmap to Net Zero by 2050
Beyond 2030, BHP’s net zero strategy includes:
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Electrifying Mining Equipment: Diesel-powered vehicles will be replaced with electric alternatives.
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Expanding Renewable Energy: The company plans to switch all grid-connected sites to 100% renewable electricity by FY2030, if possible.
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Cutting Methane Emissions: This involves better monitoring and new gas drainage tech for coal mines.
Addressing Scope 3 Emissions
BHP knows that Scope 3 emissions come from suppliers and customers. This makes them harder to manage. However, the company works with partners to reduce these emissions. In steelmaking, BHP supports technologies that lower carbon output. It encourages suppliers to follow net zero plans.
BHP supports cleaner shipping options. This includes using fuels with lower GHG emissions and enhancing vessel efficiency. These steps help lower transport emissions. The goal is to create a more sustainable industry.
Advancing Carbon Capture in Steel Production
A major step toward reducing steel industry emissions is the installation of a carbon capture unit at the Ghent blast furnace. In collaboration with ArcelorMittal, Mitsubishi Heavy Industries, and Mitsubishi Development, this initiative marks progress toward carbon-free steel production.
BHP aims to lead in sustainable mining. It sets clear targets, invests wisely, and forms industry partnerships. Additionally, they are prepared to face market challenges and promote long-term growth in a low-carbon future.
