Business Context and Reporting Period
This Form 6-K filing by BHP Group Limited covers the operational review for the financial year ended 30 June 2026, filed on 16 July 2026. The report details record iron ore production, approximately 2 Mt of copper production for the second consecutive year, and disciplined cost performance. The period includes the completion of the Carajás divestment on 2 April 2026 and the commencement of Brandon Craig as CEO on 1 July 2026.
Key Financial Metrics and Operational Performance
Production and Sales
- Copper: Total production was 1,953 kt (down 3% vs FY25). Escondida produced 1,261 kt; Copper South Australia produced 321 kt (up 2%); Antamina produced 152 kt (up 27%).
- Iron Ore: Record production of 265 Mt (up 1% vs FY25). WAIO delivered 257 Mt (0% change); Samarco produced 7.8 Mt (up 25%).
- Coal: Steelmaking coal (BMA) production was 18.6 Mt (up 3%); Energy coal (NSWEC) was 16.4 Mt (up 9%).
- By-products: Record gold production at Copper SA; uranium production increased 16%.
Realised Prices (FY26)
- Copper: US$5.74/lb (up 35% vs FY25).
- Iron Ore (WAIO): US$84.56/wmt (up 3% vs FY25).
- Steelmaking Coal: US$210.21/t (up 8% vs FY25).
- Energy Coal: US$104.28/t (down 3% vs FY25).
Costs and Margins
Unit costs for FY26 are expected to be at the bottom end of guidance ranges for Escondida, Spence, and Copper SA; within range for WAIO; and towards the top end for BMA. Average realised exchange rates were AUD/USD 0.68 and USD/CLP 920.
Debt and Liquidity
- Net Debt: Expected to be approximately US$9 billion as at 30 June 2026.
- Cash Flow Items (H2 FY26 Estimates): Net cash tax paid US$5.4–5.5 billion; Capital and exploration spend ~US$5.0 billion; Proceeds from Antamina silver streaming ~US$4.3 billion; H1 FY26 dividend payment ~US$3.7 billion.
Material Changes vs. Prior Period
- Divestment: Completed the sale of BHP's entire equity interest in SolGold (gain ~US$100M) and divested Carajás (completed 2 April 2026).
- Production Variance: Copper production declined 3% primarily due to lower feed grades at Escondida and operational challenges at Spence. Iron ore production increased 1% to a record high driven by WAIO supply chain performance.
- Impairment: A Jansen project impairment of approximately US$2,300 million (pre and post-tax) is classified as an exceptional item.
- Operational Disruptions: An unplanned conveyor belt failure at Carrapateena in July 2026 is expected to impact production for up to eight weeks.
Guidance, Outlook, and Risks
Production Guidance (FY27)
- Copper: 1,650 – 1,800 kt (down from FY26 due to grade decline at Escondida).
- Iron Ore: 260 – 272 Mt.
- Steelmaking Coal: 18.5 – 20.5 Mt.
- Energy Coal: 14 – 16 Mt.
Strategic Projects and Growth
- Jansen Potash: On track to begin production in mid-CY27 (Stage 1). Stage 2 FID expected late FY31.
- Vicuña: Received RIGI approval in Argentina; Stage 1 FID expected in CY26.
- Ministers North: Approved for investment (~US$0.9 bn); first ore expected in FY29.
- Faraday Copper: BHP signed agreements to acquire a 30% equity interest in Faraday in exchange for the San Manuel asset.
Risks and Contingencies
- Samarco Dam Failure: Ongoing financial impact subject to finalisation; H2 FY26 includes settlement payments of ~US$900M (investing cash flow) and proceeds from hedging ~US$350M.
- WA Nickel: Negative EBITDA of ~US$150M expected in H2 FY26; operations in temporary suspension.
- Macro Environment: Inflation, higher diesel prices, and global supply chain disruptions noted as headwinds, though cost control remained strong.
Investor Verification Checklist
- Verify the finalisation of the Jansen project impairment (~US$2.3B) and its impact on the full-year earnings release expected 18 August 2026.
- Confirm the timeline and production impact of the Carrapateena conveyor belt failure on FY27 copper guidance.
- Monitor the Antamina silver streaming transaction proceeds (~US$4.3B) and their classification in financing cash flow.
- Review the final net debt position (~US$9B) against the H2 FY26 cash flow estimates provided in this preliminary review.
- Track the progress of the Faraday Copper transaction closing conditions and the integration of the San Manuel asset.