BHP Group BHP announced that its iron ore production rose 1% year over year to 66.2 Mt in the second quarter of fiscal 2025 (ended Dec. 31, 2024). Higher production at Western Australia Iron Ore ("WAIO") as a result of strong supply-chain performance was partially offset by significant wet weather. This takes BHP's total iron ore production in the first half of fiscal 2025 to 130.9 Mt, 1% higher than the year-ago period.
BHP’s iron ore production guidance for fiscal 2025 is unchanged at 255-265.5 Mt. WAIO's production is likely to be in the upper half of BHP’s expectation of 250-260 Mt (282-294 Mt on a 100% basis).
Digging Deeper in BHP’s Iron Ore Production Numbers
Iron ore production at WAIO was up 1% to 128Mt in the first half of fiscal 2025. This was driven by strong supply-chain performance and record volumes at the Central Pilbara hub (South Flank and Mining Area C) following the completion of the ramp-up of South Flank in fiscal 2024. This was partially offset by the planned increase in tie-in activity of the multi-year Rail Technology Program (RTP1) and wet weather in December.
Samarco’s iron ore production increased 9% in the first half of fiscal 2025 to 2.8MT, attributed to the early resumption of Pelletizing Plant No. 4.
BHP’s Copper Production Up 10% in 1H25
BHP’s copper output improved 17% year over year to 510.7 kt in the second quarter of fiscal 2025. For the first half of fiscal 2025, BHP’s copper production was 987 kt, up 10% year over year.
Copper production at Escondida increased 22% year over year to 644 kt in the first half of fiscal 2025 as mining progressed into areas of higher-grade ore as well as increased concentrator feed grade. This was partially offset by planned lower cathode production as the integration of the Full SaL project continues. The project is expected to start production later in fiscal 2025.
Copper output at Pampa Norte (which consists of Spence and Cerro Colorado) was down 9% in the first half of fiscal 2025. Production at Spence was down 1% due to lower cathode production. Total production at Pampa Norte was down on a year-over-year basis reflecting the impact of Cerro Colorado entering temporary care and maintenance in December 2023. It had contributed 11 kt of copper in the first half of fiscal 2024.
Production from Copper South Australia was reported at 145 kt for the first half of fiscal 2025, down 2% year over year. Gains from strong underlying performance in the first quarter of fiscal 2025 were offset by the impact of a two-week weather-related power outage due to a significant storm at the beginning of the second quarter.
Antamina’s copper production was down 7% to 67 kt on slightly decreased ore grade and planned lower concentrator throughput.
The company expects copper production to be within the range of 1,845-2,045 kt in fiscal 2025.
BHP FY25 Coal Output to be in the Upper Half of Projection
Energy coal production was down 4% year over year to 3.7 Mt in the second quarter of fiscal 2025. Steelmaking coal production was 4.4 Mt, which marked a plunge of 23% from the year-ago quarter.
For the first half of fiscal 2025, steelmaking coal production was down 21% to 8.9 Mt. Production in the first half of fiscal 2025 included 3.5 Mt from the Blackwater and Daunia mines that were divested on April 2, 2024. Excluding these volumes, production of steelmaking coal was up 14% year over year. Energy coal output dipped 1% to 7.4 Mt in the first half of fiscal 2025.
Steelmaking coal production in fiscal 2025 is now expected to be in the upper half of the range of 16.5-19 Mt (33 -38 Mt on a 100% basis). Energy coal production is also expected to be in the upper half of the company’s range of 13 - 15 Mt .
BHP Witnesses Lower Iron Ore Prices, Higher Copper Prices
In the first half of fiscal 2025, average realized prices for iron ore plunged 22% year over year to $81.11 per ton. Copper prices were up 9% to $3.99 per pound. Prices for thermal coal rose 1% year over year to $124.42 per ton and steelmaking coal prices were down 23% to $206.37 per ton.
BHP’s Peer Performances
Rio Tinto RIO reported a 1% year-over-year decline in its fourth-quarter (ended Dec. 31, 2024) iron ore production to 86.5 Mt (on a 100% basis). This brings RIO’s total iron ore output for 2024 to 328 Mt, a decline of 1% year over year, within its guidance of 323-338 Mt. Production was affected by depletion, predominantly at Paraburdoo, as the company is transitioning to Western Range and Yandicoogina, as well as higher-than-average rainfall.
Rio Tinto’s shipments also declined 1% year over year to 328.6 Mt in 2024. The company expects Pilbara iron ore shipments (100% basis) to be in the band of 323-338 Mt in 2025.
Vale S.A VALE expects iron ore production of 328 Mt for 2024. The guidance indicates a 2% increase from the 321 Mt of iron ore produced in 2023.
Vale has produced 242.4 Mt of iron ore in the first nine-month period of 2024. The company’s 2024 guidance indicates production of 85.6 Mt for the fourth quarter of 2024, 4% lower than the 89.4 Mt produced in the fourth quarter of 2023.
Vale is expected to report fourth-quarter 2024 production and sales report on Jan. 28, 2025.
BHP Stock’s Price Performance
BHP shares have dipped 16.7% in a year compared with the industry’s 11.5% decline.
Zacks Investment Research
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BHP’s Zacks Rank & Stock to Consider
BHP currently carries a Zacks Rank #5 (Strong Sell).
A better-ranked stock from the basic materials space is Carpenter Technology Corporation CRS, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’ fiscal 2025 earnings is pegged at $6.77 per share, indicating 42.8% year-over-year growth. Its shares have skyrocketed 207% in a year.
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