---
endpoint: analytics
pattern: Materials
status: done
latency_ms: 172702
conversation_id: 5d542d7f-248c-4843-b248-8cc5aab5fecf
citations: 15
created: 2026-05-31 18:31:55Z
---

# What catalysts could drive upside/downside for BHP in the next 12–18 months?

# BHP Group — Catalysts for the Next 12–18 Months

BHP enters mid-2026 with a CEO transition under way, a steep copper growth pipeline rolling toward investment decisions, an upgraded near-term copper outlook, and a coal/iron-ore tape that is doing more work than usually appreciated. Below is the catalyst map split into upside and downside drivers, calibrated to the FY27 window (BHP's fiscal year ends 30 June; FY27 = Jul-2026 to Jun-2027) and into early FY28.

---

## 1. Upside Catalysts

### 1.1 Copper volume + price leverage (the dominant beat path)

- **FY26 group copper guidance now sits in the upper half of 1,900–2,000 kt**, with Escondida (upper half of 1,200–1,275 kt) and Antamina (raised to 150–160 kt from 140–150 kt) doing the lifting [1][5]. A clean Q4 FY26 print (Aug-2026 results) plus an FY27 group target of **1,000–1,100 kt at Escondida alone** sets up a positive volume revision into early FY27 [1].
- **Average realised copper of US$5.47/lb YTD March (+31% YoY)** and US$5.86/lb in Q3 FY26 — every ~10% sustained move in LME copper materially flexes EBITDA given BHP's now-dominant copper exposure [1].
- **Escondida unit cost guidance lowered to US$1.00–1.20/lb (from US$1.20–1.50/lb)** reflecting by-product credit support and operational gains — the cost-curve position is improving while peers cut [1].
- Brandon Craig (incoming CEO) has flagged that **"we have increased our copper production guidance for the next two years at a time when supply across the sector remains constrained, and peers have revised their production expectations downwards"** — i.e., the structural gap is widening [11].

### 1.2 Escondida New Concentrator FID (CY27–28 watch, but news flow starts now)

- The **Environmental Impact Declaration (DIA) permit for the Escondida New Concentrator was submitted in March 2026** [2]. A permit approval over the next 12–18 months is the most important single de-risking event in BHP's pipeline.
- Capex envelope **US$4.4–5.9bn for 220–260 ktpa**, with FID slated for CY27–28 and first production CY31–32 [3]. Any permit progress, partner alignment, or sharper capex/throughput numbers ahead of FID will move the stock.

### 1.3 Resolution Copper unlock

- Resolution Copper (BHP 45% / Rio 55%) **completed its Arizona land exchange** and can now advance underground development and the data collection needed for mine design / feasibility [2]. This is one of the world's largest untapped high-grade copper resources; even incremental milestones over the next 12–18 months reset the option value.

### 1.4 Vicuña (Filo del Sol / Josemaria) optionality

- Vicuña (50:50 JV with Lundin in Argentina) hosts **47 Mt of contained copper** per Craig — a "phenomenal" resource that BHP can develop with a partner that has on-the-ground delivery experience [15]. Pre-feasibility milestones and any government incentive framework decisions (Argentina's RIGI) over the next 12–18 months are meaningful upside flags.

### 1.5 Jansen potash — first production within the window

- **Jansen Stage 1 (US$8.4bn, 4.15 Mtpa, BHP 100%) is 78% complete, with first production targeted mid-CY27** — squarely inside the 12–18 month window [11]. Ramp-up plus first revenue contribution from a new commodity vertical is a major narrative catalyst.
- **Jansen Stage 2 (4.36 Mtpa) is under review with an update expected in Q4 FY26** (i.e., Jun-2026 quarter results) [11]. Either a green light or a capex/timing reset will move the stock.

### 1.6 Balance-sheet release & portfolio surgery

- BHP **realised ~US$4.8bn in the last month** through (a) the Antamina silver streaming deal with Wheaton (US$4.3bn upfront), (b) Carajás divestment to CoreX (US$240m + up to US$225m contingent), and (c) cash from earlier Blackwater/Daunia divestments [9][6]. This rebuilds capacity for the August dividend, accelerates buyback optionality, and adds firepower for "smaller bolt-on acquisitions, when the value case supports them" [12].
- Craig has explicitly signalled an evolution toward more **partnerships and bolt-ons** ("increasing exploration, seeking opportunities to partner with peers… and by executing smaller bolt-on acquisitions") [12] — i.e., M&A optionality is back on the table but framed as disciplined.

### 1.7 CEO transition narrative

- **Brandon Craig becomes CEO on 1 July 2026** [10], the first day of FY27. Craig is widely associated with the copper-led re-rating of BHP (he was President-Americas during Escondida's record runs). His first strategy day / FY26 results call (August 2026) and a likely investor update inside the 12-month window are the single biggest narrative catalyst — markets typically reward "fresh CEO, clean slate" with multiple expansion if the strategic direction is credible.

### 1.8 Iron ore: WAIO record + Samarco at the top of guidance

- **WAIO production guidance for FY26 remains at 251–262 Mt (284–296 Mt 100% basis)** and BHP **concluded contract negotiations with China Mineral Resources Group (CMRG)** [7] — removing a 12-month overhang on price realisation.
- **Samarco production now expected at the top end (7–7.5 Mt)** in FY26, with the second concentrator ramped [7] — a high-margin volume tailwind through FY27.
- Realised iron ore price US$84.91/wmt YTD March (+2% YoY) — modest, but with WAIO targeting **>305 Mtpa from Q4 FY28 at <US$17.50/t unit costs** [13][1], the medium-term cash engine is intact and any China stimulus reflation flows straight through.

### 1.9 Coal — steelmaking coal price ramp

- **Steelmaking coal realised US$226.76/t in Q3 FY26 (+15% QoQ, +23% YoY)**; YTD US$200.25/t [1]. Even though BMA FY26 production is set for the lower half (18–20 Mt range) [8], coking coal prices have already inflected and a sustained rally would surprise consensus to the upside given the perception of coal as a runoff asset.

---

## 2. Downside Catalysts

### 2.1 Spence (Pampa Norte) — the explicit miss

- **Spence FY26 copper guidance was cut to 210–220 kt from 230–250 kt** [4]. Ore complexity, declining grades and recovery issues at both the concentrator and cathode plant are the cause. Management plans an upgraded flotation cell FID in **H1 FY27** [4]; until then, every quarter risks further negative revisions and is the single most likely "miss" line item.

### 2.2 Energy / consumables cost pressure from Middle East

- Craig has flagged that **"the Middle East disruption translates more to a pricing impact, to a supply chain risk impact, particularly with diesel"** [13]. With BMA already at the top end of US$116–128/t unit cost guidance [1] and broader cost-of-energy pressure noted across the portfolio [9], a renewed oil/diesel spike would compress margins.

### 2.3 BMA wet-weather and geotech overhang

- FY26 BMA guidance held but **production expected in the lower half (18–20 Mt)** [8]; Q3 FY26 saw the highest rainfall in 15 years, ongoing geotechnical challenges at Broadmeadow, and Saraji South into care & maintenance. Another wet season + a delayed Broadmeadow ramp would be a tangible drag on FY27 H1.

### 2.4 China iron-ore demand / CMRG buyer-power risk

- The CMRG iron-ore contract was successfully concluded for FY26 [7], but the structural shift toward a single Chinese state-coordinated buyer is a recurring negotiation risk every cycle. A weaker China property/stimulus impulse compounds the price-realisation exposure given iron ore is still the cash engine.

### 2.5 Capex creep / Jansen execution risk

- BHP's own CEO-elect has acknowledged Jansen as the single project where **"we've got some productivity assumptions incorrect and where we didn't estimate inflation and escalation appropriately"** [14]. The pending Stage 2 review (Q4 FY26) is the catalyst — a second capex reset would dent the "delivered within 3% of estimates on $35bn invested" track record [14].

### 2.6 Iron-ore growth-capex hump

- WAIO is mid-investment in Western Ridge, Ministers North and rail/port infrastructure to step volumes to ~305 Mtpa, with port at Port Hedland as the binding constraint at 330 Mtpa [14]. Slippage on any of these — alongside the multi-year Rail Technology Program — could push the cash-flow inflection out beyond FY28.

### 2.7 Resolution Copper / Escondida permit risk

- Both crown-jewel growth projects rest on **environmental permits and political/social licence**. The Escondida New Concentrator DIA must be approved by Chilean regulators; Resolution still faces US permitting complexity post land exchange [2]. A material delay (>6 months) on either pushes the FID timing past CY28 and undermines the multi-year copper growth narrative.

### 2.8 Samarco tail liability + sector ESG

- Samarco continues to produce, but the Brazil tailings-dam legacy provisions remain a tail risk. Any adverse legal/political development through CY26–CY27 reopens the question of how much remediation BHP carries.

### 2.9 Coal divestment overhang

- BHP completed Blackwater/Daunia/Carajás exits [9]. Pressure persists for further runoff of remaining coal exposure (NSWEC energy coal, BMA stake structure) and the question of whether the remaining footprint is harvested or sold at a discount. A "sale at troughed price" would be value-destructive.

---

## 3. Calendar of Discrete Catalysts (next 12–18 months)

| Date / Window | Event | Direction |
|---|---|---|
| Q4 FY26 (Jun-26) | Jansen Stage 2 review update [11] | Bi-directional |
| 1 Jul 2026 | Brandon Craig becomes CEO [10] | Upside (narrative) |
| Aug 2026 | FY26 full-year results + Craig's first capital-markets address | Bi-directional |
| H1 FY27 | Spence flotation-cell FID [4] | Mild upside |
| FY27 (rolling) | Escondida New Concentrator DIA permit decision [2][3] | Major upside if granted |
| FY27 (rolling) | Resolution Copper feasibility-stage data [2] | Optionality |
| Q1–Q2 FY27 | China iron-ore (CMRG) re-negotiation overhang | Downside risk |
| Mid-CY27 | Jansen Stage 1 first production [11] | Major upside |
| CY27–28 | Escondida New Concentrator FID [3] | Outside window — but news flow inside |

---

## 4. Bottom Line

The next 12–18 months are dominated by **copper volume + cost out-performance**, the **CEO handover narrative**, **balance-sheet release (~US$4.8bn realised)** [9], and the **Jansen Stage 1 first-production event mid-CY27** [11]. The principal downside risk vectors are **Spence's structural ore-complexity miss** [4], **diesel/cost pressure flowing from the Middle East** [13], and **execution slip on either Jansen Stage 2 or the Escondida permit** [2][3]. Net-net, the asymmetry skews positive — but Spence and the Middle East cost line are the two items most likely to spoil a clean upgrade cycle into early FY27.

---

**Sources**
[1] BHP — Q3 FY26 Operational Review (22 Apr 2026) — copper guidance upper half, realised prices, Escondida cost guidance lowered
[2] BHP — Q3 FY26 Operational Review — Escondida DIA permit submitted Mar 2026; Resolution Copper land exchange
[3] BHP — Q3 FY26 Operational Review — Escondida New Concentrator capex US$4.4–5.9bn, 220–260 ktpa, FID CY27–28
[4] BHP — Q3 FY26 Operational Review — Spence cut to 210–220 kt; flotation FID H1 FY27
[5] BHP — Q3 FY26 Operational Review — Antamina raised to 150–160 kt
[6] BHP — Q3 FY26 Operational Review — Carajás divestment US$240m + US$225m contingent
[7] BHP — Q3 FY26 Operational Review — CMRG iron-ore contract concluded; Samarco top of range
[8] BHP — Q3 FY26 Operational Review — BMA lower-half guidance, top-end unit cost
[9] BHP — Q3 FY26 Operational Review CEO Summary — US$4.8bn realised (Wheaton silver stream + Carajás + Blackwater/Daunia)
[10] BHP — Q3 FY26 Operational Review — Brandon Craig CEO from 1 Jul 2026
[11] BHP — Q3 FY26 Operational Review — Jansen Stage 1 78% complete (mid-CY27 first prod); Stage 2 review Q4 FY26
[12] BHP — Bank of America Global Metals, Mining & Steel Conference (12 May 2026) — Craig on growth, bolt-on M&A, copper guidance differential vs peers
[13] BHP — BofA Metals Conference (12 May 2026) — Middle East / diesel supply impact
[14] BHP — BofA Metals Conference (12 May 2026) — Jansen capex lesson; WAIO 305 Mtpa / Port Hedland 330 Mtpa
[15] BHP — BofA Metals Conference (12 May 2026) — Vicuña 47 Mt copper resource, Lundin JV

## Citations

- [1] **BHP Group Limited, Q3 2026 TU Report** · external
- [2] **BHP Group Limited, Q3 2026 TU Report** · external
- [3] **BHP Group Limited, Q3 2026 TU Report** · external
- [4] **BHP Group Limited, Q3 2026 TU Report** · external
- [5] **BHP Group Limited, Q3 2026 TU Report** · external
- [6] **BHP Group Limited, Q3 2026 TU Report** · external
- [7] **BHP Group Limited, Q3 2026 TU Report** · external
- [8] **BHP Group Limited, Q3 2026 TU Report** · external
- [9] **BHP Group Limited, Q3 2026 TU Report** · external
- [10] **BHP Group Limited, Q3 2026 TU Report** · external
- [11] **BHP Group Limited, Q3 2026 TU Report** · external
- [12] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [13] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [14] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external
- [15] **BHP Group Ltd., Bank of America Global Metals Mining and Steel Conference, 12-May-2026 9** · external

