Mining behemoth BHP has announced its highest dividend payout in four years, fueled by record earnings driven by a surge in copper prices. The company's copper mines delivered a 48% profit increase to $18 billion in the fiscal year ending June 30, overtaking iron ore's contribution for the first time.
Copper now accounts for 54% of BHP's total underlying earnings before interest, taxation, depreciation, and amortization (Ebitda), which reached $33 billion, a 27% year-on-year increase. Chief Executive Brandon Craig, who recently took the helm, emphasized copper's role as an "engine" of growth for the company. His appointment in March signaled BHP's strategic focus on expanding copper production, a move initiated under former CEO Mike Henry who reduced the company's exposure to coal.
"Copper is the engine that is driving BHP's growth," Craig stated. "For the first time, copper contributed more than half our underlying Ebitda and generated significant free cash flow, which means our copper growth is self-funding."
BHP, an Australian firm with a secondary listing in London, raised its annual dividend to $1.72 per share. The company's headline annual profits rose 30% to $13.2 billion, exceeding expectations, while revenue saw a 15% increase to $58.1 billion. Shares in London rose 0.89% at the market open, contributing to a 44% rise year-to-date.
The demand for copper has been bolstered by the global shift towards alternatives to fossil fuels, making it a key component in electric vehicles and power generation. Record prices, exceeding $14,000 per metric tonne this year, have also been driven by substantial investments in artificial intelligence (AI) data centers. BHP projects that global copper demand will grow to 50 million tonnes by 2050, up from the current 34 million tonnes, despite potential short-term production challenges.
Beyond copper, BHP has seen significant gains from byproducts, with revenue from gold, silver, and uranium jumping 45% to $4.5 billion over the past year. The company remains optimistic about future performance, with Craig noting "significant opportunity to further lift performance across our assets and a clear pathway for growth."
Despite expectations of a global economic slowdown, BHP anticipates that investments in digital infrastructure and AI will continue to support commodity demand. Axel Rudolph, chief technical analyst at IG, commented that copper's increasing importance to BHP, now representing over half of its earnings, highlights a strategic pivot towards a metal poised for sustained demand growth, further strengthened by record iron ore production and a generous dividend payout.