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BHP’s first annual general meeting under chief executive Brandon Craig has highlighted the opportunities and risks facing investors, with copper growth, Jansen potash cost overruns and Australia’s investment competitiveness emerging as key themes.
While Craig outlined plans to expand production, chair Ross McEwan adopted a prominent role in addressing broader strategic and policy questions.
“Company-wide, our current plans are expected to support compound annual production growth of approximately three to four per cent through to 2035, including around five per cent annual growth for copper,” Craig said.
“It is essential that this growth is delivered to plan.”
Copper drives the investment case
Copper has become BHP’s largest earnings contributor, accounting for more than half of group earnings for the first time in financial year 2026.
“Today, BHP is the world’s largest copper producer,” Craig said.
“That matters because copper is becoming increasingly important to the modern economy.”
BHP’s growth pipeline includes investment in the Escondida New Concentrator in Chile, an expanded mineral resource base in South Australia and further opportunities across the Americas.
Olympic Dam has recorded its highest production in more than 20 years, reinforcing the importance of BHP’s South Australian operations to its longer-term plans.
However, the September quarter demonstrated the operational challenges involved in delivering that growth.
Copper production was affected by planned grade declines, maintenance, severe weather in Chile, safety stoppages and a conveyor failure at Carrapateena.
Full-year guidance remained unchanged, while copper prices around 50 per cent higher than a year earlier provided a favourable earnings backdrop.
Speaking ahead of the AGM, Sharesies Australia head of capital markets Jacki Neumann identified copper performance as an early test of Craig’s leadership.
“Some of that drop was planned, and full-year guidance hasn’t changed,” Neumann said.
“But investors will want confidence that BHP can manage the headwinds and that its copper pipeline can translate into reliable returns.”
Jansen tests project execution
Shareholder questions about cost increases at BHP’s Jansen potash project in Canada brought the company’s project delivery record into focus.
Craig acknowledged that BHP had underestimated the scale of the challenge to achieve its original construction productivity targets.
“We underestimated the effort it would take us to get the productivity to the benchmarks we set out when we originally estimated the cost for the project,” Craig said.
He also attributed the overruns to inflation exceeding historical assumptions, with post-COVID inflation of 12–13 per cent annually for just over two years materially affecting costs.
Despite those setbacks, Craig defended Jansen’s long-term economics.
He said the operation could have a life exceeding 70 years, with projected operating costs of around $120 per tonne against a current market price of approximately $300 per tonne, supporting expected margins of about 60 per cent.
Those projections provide a rationale for continued investment, although the eventual returns will depend on construction costs, operating performance and potash prices.
BHP’s latest quarterly update showed Jansen Stage 1 was 87 per cent complete, with first production expected in mid-2027.
ETF Shares chief investment officer David Tuckwell said the AGM revealed stronger support for Jansen than recent criticism of its escalating costs and development timelines might suggest.
“Jansen is more popular with shareholders than you might think. It’s been hit in the sell-side commentary but despite the scepticism over spending and timelines, shareholder and board support for the Jansen project came through strong. BHP treated it as a non-negotiable cornerstone of its long-term growth,” he said.
That support suggests the project’s strategic importance remains intact despite the setbacks, although the approach of first production will bring its execution and economics under closer scrutiny.
Australia’s investment competitiveness in focus
The AGM also highlighted the importance of government policy in determining where BHP deploys future capital.
Tuckwell said the AGM suggested an emerging division of responsibilities between the two leaders, with McEwan taking ownership of strategy and capital allocation while Craig concentrated on operational delivery.
“McEwan’s taking direct ownership of macro strategy, policy fights, and capital allocation. Craig seemed more like he was in an operational lane, and he presented essentially as more of an execution guy than grand strategist,” Tuckwell said.
Tuckwell observed that McEwan had adopted a more prominent public role than is typical for a company chairman, particularly in addressing Australia’s taxation and royalty settings.
He pointed to McEwan’s renewed criticism of Queensland’s coal royalties and his comparison of Australia’s fiscal environment with more investment-friendly jurisdictions such as Canada.
With growth opportunities spanning copper, potash and iron ore across several jurisdictions, the relative attractiveness of taxation, royalties and regulatory requirements could become increasingly important.
Tuckwell also detected a shift in BHP’s approach to decarbonisation, with the AGM placing greater emphasis on commercial considerations than the more ambitious climate messaging associated with previous leadership.
For investors, the policy discussion offers a reminder that the location of future investment may be influenced as much by government settings as by the quality of underlying resources.
Balancing growth and shareholder return
BHP’s expansion plans must also be considered alongside its commitment to shareholder distributions.
Financial year 2026 dividends totalled approximately $2.40 per Australian share, equivalent to $US8.7 billion and the company’s highest annual dividend in four years.
Neumann identified the balance between investment and distributions as another important measure of Craig’s performance.
“BHP is investing across copper, potash and iron ore and it needs to do that without squeezing shareholder returns,” she said.
“Investors want to see cost control, projects delivered as promised, and capital continuing to earn a solid return.”
McEwan argued that BHP’s diversified portfolio positioned the company to navigate changing commodity cycles.
“One of the reasons we’re confident is because of the way our business is positioned for the future. Mining is cyclical; there are peaks and there are troughs. What we have is a portfolio that is designed to perform through the cycle,” McEwan said.
“The world needs growth; it needs new infrastructure, reliable energy, modern technology, and food security. All of these things depend on the resources that BHP produces.”
What investors should watch
Three developments will provide important tests of BHP’s investment outlook over the coming years:
- The first is copper production, with investors looking for a recovery from September-quarter disruptions and evidence that the company’s growth pipeline can support its longer-term targets.
- The second is Jansen, where progress towards first production in mid-2027 will help determine whether the project’s projected operating advantages can outweigh its construction cost increases.
- The third is BHP’s investment priorities, particularly whether Australia’s fiscal settings influence the balance of future spending between domestic operations and overseas opportunities.
Together, these developments will help determine whether BHP can achieve its targeted production growth while sustaining the dividends that remain central to its appeal to shareholders.
For Craig, the ambition is clear.
“Our ambition is simple: to win the next decade for BHP.”
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