---
endpoint: analytics
pattern: Materials
status: done
latency_ms: 234919
conversation_id: 5385872a-bde0-4dfe-9e0d-0c828b84dc88
citations: 20
created: 2026-05-31 19:28:18Z
---

# Provide a one‑year narrative of BHP, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# BHP Group — One-Year Narrative (June 2025 to May 2026)

## Setting the Stage: The June 2025 Backdrop
Heading into the June 2025 fiscal year-end, BHP carried strong operational momentum: copper volumes had grown 28% over three years (passing the 2 million tonnes-per-annum mark for the first time), Western Australia Iron Ore (WAIO) had set another production record at 290 million tonnes, and unit costs had been reduced by ~5% despite an inflationary backdrop. EBITDA margins held at 53%, ROCE at 21%, and attributable profit landed at **$10.2 billion**, supporting a full-year dividend of $1.10/share ($5.6 billion) [1]. Sentiment around this base business was constructive — a "core compounder" narrative — but it was overshadowed almost immediately by a major project disappointment.

## August 2025 — FY25 Results: Operational Strength vs Jansen Setback
The release of FY25 results in August was a study in divergence. The base portfolio (iron ore, copper, coal productivity) was performing, but the **Jansen Potash Stage 1 project in Canada incurred material cost overruns**, with management openly conceding execution failure: "we got caught on the wrong side of escalating inflation and escalation in Canada" [2]. Stage 2 development was simultaneously delayed by ~2 years. For investors, this revived two concerns: (a) BHP's project-execution credibility relative to the clean South Flank precedent, and (b) the magnitude of forward capex in a period when copper greenfields (Vicuña) and brownfields (Escondida) were already pulling on the balance sheet. The print also kept the **Samarco UK class-action liability** alive — an unresolved tail risk the market had been periodically forced to re-underwrite.

## September 2025 — Sector M&A Heat and a Sentiment Trough
September was the most volatile month for the BHP story:
- **September 11 — Anglo American / Teck merger** announced. The deal was widely interpreted as a re-opening salvo in mining-sector consolidation and a direct rebuke to BHP's failed 2024 Anglo approach. It forced the market to reassess whether BHP had been "outmanoeuvred" in the race for top-tier copper assets [14].
- **September 15 — BNP Paribas Exane downgraded BHP to Underperform** from Neutral [15], crystallising the rising-skepticism camp.
- **September 19 — The Financial Times reported Geraldine Slattery was the likely successor to CEO Mike Henry** [13], opening a multi-month succession overhang.
- **September 21 — Global Infrastructure Partners** was reported to have approached BHP about acquiring certain infrastructure assets (power, water, rail) [16], aligning with management's emerging "capital recycling" thesis.

The cumulative effect was a clear sentiment trough — investors were asking three questions simultaneously: who runs the company, can it execute mega-projects, and is it being lapped on M&A?

## October 2025 — AGM: Rewriting the Copper Identity
The October 22 AGM in Melbourne — the first chaired by Ross McEwan (Ken MacKenzie having retired 31 March 2025) — was used to reset the narrative around BHP as a **copper-led growth story rather than a diversified miner**. Mike Henry told shareholders: **"this year, 45% of our EBITDA came from copper, more than double where it was five years ago"** [3]. The growth pipeline was reframed around four pillars: Copper South Australia, Escondida/Chile, the **Vicuña JV in Argentina (described as holding "exceptional copper deposits")**, the 45%-owned Resolution Copper in Arizona, and Jansen potash [4]. Management also lobbied publicly for Australian energy and approval-cost reform, a not-subtle reminder that domestic policy now competes with Argentina's RIGI scheme and U.S./Canadian permitting initiatives.

## Late 2025 — Portfolio Pruning and Sentiment Inflection
- **December 9** — Press reports surfaced that **South32 was considering a bid for BHP's West Musgrave nickel mine**, accelerating the disposal of marginal/non-core legacy assets [17].
- **December 30** — **Argus Research upgraded BHP to Buy from Hold**, marking the start of a re-rating trade as commodity-price tailwinds (copper > $10,000/t, iron ore stable in the $90s) and the "more disciplined BHP" thesis began to compound [18].

## February 2026 — December Half: Vindication
The December 2025 half-year result was the inflection point that converted operational delivery into a re-rate:
- Group **copper-equivalent production +2%**, costs -5% nominal (~ -7% in real terms). Mike Henry asserted BHP was **"the only major Pilbara producer to generate real cost declines since COVID"** [5].
- **Copper guidance raised by a cumulative 150,000 tonnes across 2026 and 2027** — "this is at a time, of course, when many of our competitors are cutting" [6]. This was the single most differentiating data point of the year: BHP delivering supply at peak copper prices while peers (Anglo, First Quantum, Codelco) struggled.
- A **"latent capital unlock" target of up to $10 billion** was articulated, with $6.3 billion already executed — including the WAIO inland-power deal and the Antamina silver streaming agreement with Wheaton [9].
- The interim dividend was set at **$0.73/share, +46% half-on-half** [8] — comfortably above consensus.
- M&A discipline was reaffirmed: **"our position on M&A really has remained unchanged"** [7], rebuffing the post-Anglo/Teck market chatter and effectively redirecting attention back to organic growth.

The market response was a steady re-rating from the low-£19s area to the high-£20s/A$50s+, helped by buy-side rotation back into "quality diversified" miners.

## March–April 2026 — Operational Delivery
Q3 production (calendar Q1 2026) reinforced the thesis: **iron ore output came in at 62.8Mt versus a 61.6Mt StreetAccount expectation** [19], the kind of consistent low-single-digit beat that institutional holders reward. Concurrently, **BHP and Mitsubishi Development launched a financial-health review of their Queensland coal joint venture assets** [20] — read as the next leg of portfolio simplification (potential further coal divestments after Blackwater/Daunia).

## May 2026 — Succession Resolved
At the Bank of America Global Metals, Mining & Steel conference, **Brandon Craig** was unveiled as CEO-elect, succeeding Mike Henry on 1 July 2026 — putting to rest the Slattery speculation from September. Craig's pitch to investors was a continuity-plus-acceleration message: he emphasised that **"since 2020, we have delivered total shareholder returns of more than 300%"** [10] — roughly 25 percentage points ahead of closest peers — and credited operational productivity for **"30% underlying growth in the copper produced from the business"** [11]. Crucially, he reframed BHP's forward growth posture as **"programmatic growth"** built on **"increasing exploration, seeking opportunities to partner with peers… and by executing smaller bolt-on acquisitions"** [12] — a deliberate signal that a repeat of the 2024 Anglo American mega-deal was not on the agenda.

## Synthesis: How the Sentiment Arc Translated to Valuation

| Phase | Key Drivers | Investor Sentiment | Implied Valuation Effect |
|---|---|---|---|
| **Jun–Aug 2025** | FY25 strong base, Jansen overrun, Stage 2 deferral | Mixed – execution doubt vs cash story | Multiple compression on capex fears |
| **Sep 2025** | Anglo/Teck deal, BNP downgrade, CEO succession rumours, GIP infra approach | Trough – questions on M&A, leadership, project delivery | ~10–12% relative de-rating vs RIO/peers |
| **Oct–Dec 2025** | AGM copper reset, non-core sales (West Musgrave), strengthening copper price | Stabilisation, then upgrade cycle begins | Argus upgrade marks turn |
| **Feb 2026** | 1H26 cost discipline, +150kt copper guidance, +46% interim DPS, $10bn capital unlock | Vindication – "differentiated growth" thesis re-anchored | Re-rating into peer-leading territory |
| **Mar–May 2026** | Iron ore beat, coal portfolio review, Brandon Craig succession with bolt-on framing | Confidence – removes overhangs | Sustains premium; "quality compounder" status restored |

By end-May 2026, BHP had effectively pivoted its identity from **"diversified miner with overlapping headwinds"** in September 2025 to **"the copper growth story among majors with peer-leading cost discipline and a disciplined, identified leadership succession"** — a transformation paid for by the willingness to take a near-term hit on Jansen, walk away from Anglo, and let the operating result speak.

---
**Sources**
[1] BHP Group, Q4 2025 Earnings Call (FY25 results), 19-Aug-2025
[2] BHP Group, Q4 2025 Earnings Call (FY25 results) – Jansen overrun, 19-Aug-2025
[3] BHP Group, Annual General Meeting – copper share of EBITDA, 22-Oct-2025
[4] BHP Group, Annual General Meeting – Vicuña / Resolution Copper, 22-Oct-2025
[5] BHP Group, Q2 2026 Earnings Call – real cost decline, 17-Feb-2026
[6] BHP Group, Q2 2026 Earnings Call – +150kt copper guidance, 17-Feb-2026
[7] BHP Group, Q2 2026 Earnings Call – M&A posture, 17-Feb-2026
[8] BHP Group, Q2 2026 Earnings Call – interim dividend, 16-Feb-2026
[9] BHP Group, Q2 2026 Earnings Call – $10bn capital unlock, 16-Feb-2026
[10] BHP Group, BoA Global Metals Mining and Steel Conference – 300% TSR, 12-May-2026
[11] BHP Group, BoA Conference – 30% copper productivity growth, 12-May-2026
[12] BHP Group, BoA Conference – programmatic / bolt-on growth, 12-May-2026
[13] StreetAccount – "Geraldine Slattery likely successor", 19-Sep-2025 (FT)
[14] StreetAccount – Anglo-Teck merger to trigger consolidation, 11-Sep-2025
[15] StreetAccount – BNP Paribas Exane downgrade to Underperform, 15-Sep-2025
[16] StreetAccount – GIP approach for BHP infrastructure assets, 21-Sep-2025 (AFR)
[17] StreetAccount – South32 considering bid for West Musgrave, 9-Dec-2025 (The Australian)
[18] StreetAccount – Argus Research upgrade to Buy, 30-Dec-2025
[19] StreetAccount – Q3 iron ore 62.8Mt beat, 21-Apr-2026
[20] StreetAccount – BHP/Mitsubishi Queensland coal review, 20-Apr-2026 (Bloomberg)

## Citations

- [1] **BHP Group Ltd., Q4 2025 Earnings Call - Second Call, 19-August-2025 7** · external
- [2] **BHP Group Ltd., Q4 2025 Earnings Call - Second Call, 19-August-2025 7** · external
- [3] **BHP Group Ltd., Annual General Meeting, 22-October-2025 8** · external
- [4] **BHP Group Ltd., Annual General Meeting, 22-October-2025 8** · external
- [5] **BHP Group Ltd., Q2 2026 Earnings Call - Second Call, 17-February-2026 3** · external
- [6] **BHP Group Ltd., Q2 2026 Earnings Call - Second Call, 17-February-2026 3** · external
- [7] **BHP Group Ltd., Q2 2026 Earnings Call - Second Call, 17-February-2026 3** · external
- [8] **BHP Group Ltd., Q2 2026 Earnings Call - First Call, 16-February-2026 6** · external
- [9] **BHP Group Ltd., Q2 2026 Earnings Call - First Call, 16-February-2026 6** · external
- [10] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [11] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [12] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [13] **BHP Group likely to appoint Geraldine Slattery as Mike Henry successor -- FT** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4405973&_doc_date=2025-09-19&_doc_product=SA>
- [14] **Anglo-Teck merger poised to trigger mining consolidation surge** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4399648&_doc_date=2025-09-11&_doc_product=SA>
- [15] **BHP Group downgraded to underperform from neutral at BNP Paribas Exane** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4401555&_doc_date=2025-09-15&_doc_product=SA>
- [16] **Global Infrastructure Partners approached BHP Group with interest in certain infrastructure assets** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4406373&_doc_date=2025-09-21&_doc_product=SA>
- [17] **South32 considering bid for BHP's West Musgrave nickel mine** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4498113&_doc_date=2025-12-09&_doc_product=SA>
- [18] **BHP Group upgraded to buy from hold at Argus Research** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4510576&_doc_date=2025-12-30&_doc_product=SA>
- [19] **BHP Group reports Q3 iron ore production 62.8Mt vs StreetAccount 61.6Mt** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4634347&_doc_date=2026-04-21&_doc_product=SA>
- [20] **BHP, Mitsubishi Development launch review process to rank financial health of their Queensland coal mines and assets** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4632724&_doc_date=2026-04-20&_doc_product=SA>

