Australian mining powerhouse BHP has announced its intention to continue expanding its copper production, despite the setback of its failed bid for Anglo American earlier this year. The Melbourne-based company, which withdrew its offer for Anglo in May following the Anglo board’s rejection of its third attempt in an all-share proposal, has indicated it will not resort to overpaying for acquisitions.
Since the failed bid, Anglo American’s share price has risen by over 10%, while BHP’s has similarly declined. This raises questions about whether BHP might reconsider pursuing Anglo once the six-month “put up or shut up” period concludes later this year. However, BHP CEO Mike Henry made it clear during the release of the group’s year-end results that Anglo was not central to BHP’s strategy. “Plan A is what you see outlined in these results,” Henry stated, emphasizing that the company had no plans to acquire Anglo’s steelmaking coal assets in Australia, which are currently on the market.
Despite the Anglo setback, BHP remains open to mergers and acquisitions, provided the conditions are right: “right commodity, right asset quality, right price, yes,” Henry noted.
For the year ending June, BHP reported a 2% increase in underlying profit to $13.7 billion. However, it reduced its dividend as it chose to retain cash for investing in its core growth areas, particularly copper, which now contributes approximately 30% to the group’s underlying profit.
Even though copper prices have retreated from recent peaks due to waning demand from China, BHP maintains a highly optimistic outlook on the metal. The company views copper as critical for supporting major trends such as population growth, decarbonisation, and the expansion of data centers essential for artificial intelligence. BHP forecasts a 70% increase in copper demand by 2050, though it also anticipates a structural deficit in the market by the end of this decade due to the increasing depth and complexity of copper mining.
BHP had specifically targeted Anglo’s valuable copper assets in Latin America. Nonetheless, the Australian company added 300,000 tonnes to its copper production over the past year and has emphasized its focus on copper and potash (fertiliser) for future growth. Despite this shift, BHP remains the world’s lowest-cost producer of iron ore, its traditional mainstay.
“We’re in a process right now of reshaping the portfolio for the future,” Henry said.
BHP’s copper production grew by 9% for the second consecutive year, positioning the company as the fastest-growing in copper exposure during that period. The company anticipates a further 4% growth in copper production by 2025. Recently, BHP partnered with Canada’s Lundin Mining to acquire Toronto-listed Filo Corporation, which owns the Filo del Sol and Josemina projects near the Argentina-Chile border. This deal is expected to finalize early next year. Additionally, BHP acquired the South Australian copper mines of Oz Minerals last year.