Q+A: Copper is now BHP’s biggest earner. What comes next?
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What are BHP’s latest earnings and cash‑flow results?
Welcome to Fear and Greed QA, where we ask and answer questions about business, investing, economics, politics, and more. I'm Sean Aylmer. BHP has delivered a huge lift in full-year earnings and cash flow, but the bigger story might just be what it plans to do with all that cash. The mining giant is accelerating a major pipeline of copper projects as it bets that electrification, data centres, and the energy transition will drive a structural. shortage of one of the world's most important commodities. Vandieta Pant is Chief Financial Officer of BHP. Vandieta, welcome back to Fear and Greed QA.
I'm very glad to be here, Sean.
Congratulations on the result. Um plenty of cash, I suppose. I mean the CFO, I'm sure that makes you happy. The question is, what do you plan to do with it?
How is copper now generating more than half of BHP’s earnings?
Yes. And the cash gets created, as you know, Sean, from uh really performing day in and day out uh in our operations. And we have had, as you said, a stellar year operationally and financially. Um copper, you may know that we are the largest copper producer in the world. And uh last year we delivered almost two million tons of copper for second year running. And what is uh new though is that copper for the first time is more than half of our earnings. And then, of course, in Western Australia, our INO business, which is a great business, uh, continued to break records with the uh record production and shipment. And for the seventh year in a row, was the lowest cost producer or of INO. The world over.
To your point, we had tailwinds of prices. Copper prices were up 35% in the year, and iron ore prices were up 3%. With that, along with real cost discipline and strong operational performance, we have increased our earnings by 27%. And of that, As you said, huge cash generation, 17% higher operating cash flow, leading to balance sheet, which is very strong, less than $9 billion on net debt. And that resulted in a very strong dividend of $8.7 billion for the full year, which is the highest dividend for us. That we have been able to reward the shareholders in last four years. So lots of cash, but the exciting part is that we have great high-quality growth options to deploy that in, but equally, as we have shown this year, to be able to reward our shareholders with very attractive shareholder returns as well.
Yeah, I mean I ca I mean I'm sure that is a definitely a highlight is that shareholders are actually getting something in their hand, but you're also talking about investing. I know you're talking about South Australia in terms of copper, copper, South America in terms of copper. How do you make the decision on where you're going to deploy that capital?
Yes, so we are very deliberate, Sean, in terms of starting with are we in the right commodities? Because you want to invest in commodities which have these mega uh demand increase for decades to come and in which we can have really tier one assets which uh produce a lot of cash uh for for decades again. So on that count we really like copper. Copper is a ubiquitous in which is used in many, many value chains. And not just the traditional demand drivers of urbanization, living standard increases, demand comes for copper, but now that's getting amplified because of data center, digitalizations, infrastructure, and Electrification and power networks, which is the non-standard, non-traditional way in which copper is getting used.
So we have four great high-quality copper options across the world. One here in South Australia, Copper SA, in fact, Olympic Dam had record production last year, the highest production. Of its 20 years history. And off the base of that, we're looking to grow from 320 KT copper into a 500 KT copper in first phase, and then that goes on to. uh six hundred and fifty KT. So really round the corner in the next eighteen months, uh uh copper project here in South Australia. Then we have a project in called Bicunia in Argentina. for which the investment uh decision will be uh later this uh could be as early as later this year. Uh that with all ramped up uh production could be one of the top five copper assets in the world.
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