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# BHP Group Limited (BHP): Narrative for the fiscal year ended 30 June 2026 (FY2026) BHP's fiscal year runs from 1 July to 30 June, and the company calls the year ended 30 June 2026 "FY2026". BHP presents its financial statements in US dollars under IFRS, so every amount below is in US dollars as the company reports it and none has been converted from another currency. On the NYSE, BHP trades as American Depositary Shares (ADSs), each representing two ordinary shares. Per-share figures below, including dividends and earnings per share, are per ordinary share unless stated otherwise. Sources: the Business, Risk factors and MD&A sections come from the FY2026 annual report on Form 20-F, accession 0001193125-26-354647, filed 18 August 2026. The current-period section uses the Operational Review for the year ended 30 June 2026 (Form 6-K, accession 0001193125-26-306705), the BHP Annual Report 2026 and the FY2026 results announcement, both furnished on Form 6-K (accession 0001193125-26-355840). Subsequent events come from note 33 of the 20-F and from the Form 6-K filings cited in that section. --- ## Business BHP is the world's largest copper producer, the lowest-cost major iron ore producer by its own analysis, and one of the largest suppliers of higher-quality steelmaking coal to the seaborne market. It mines copper (with gold, silver, uranium, zinc and molybdenum as by-products), iron ore, steelmaking coal and energy coal, and sells them mostly to customers in Asia, including steelmakers. Revenue comes from the volume shipped times the realised commodity price, so earnings swing with copper, iron ore and coal prices. In FY2026 revenue was $58.76 billion: Copper contributed $29.03 billion, Iron Ore $23.88 billion and Coal $5.59 billion. Customers in China accounted for $34.21 billion, or about 58%, followed by Japan ($5.81 billion), India ($3.66 billion), South Korea ($3.22 billion) and Australia ($2.86 billion). BHP is also building a potash business in Canada, with first production expected in mid-calendar 2027. FY2026 was the first year in which copper contributed more than half of Group Underlying EBITDA, at a 70% EBITDA margin. BHP produced about 2 million tonnes of copper for the second year running. WAIO, its Western Australian iron ore business, posted record production and held its lowest-cost position for the seventh consecutive year. **Reportable segments and principal assets** (ownership as stated in the 20-F): - **Copper.** Escondida in Chile's Atacama Desert (BHP 57.5%, operated) is the world's largest copper mine. It has two open-cut pits feeding three concentrators and two leaching operations. Pampa Norte (100%) comprises Spence, plus Cerro Colorado, which has been in care and maintenance since December 2023. Copper South Australia (100%) comprises the Olympic Dam, Carrapateena and Prominent Hill operations and the Oak Dam exploration project, and produces copper cathode and concentrate, gold, silver and uranium oxide. The non-operated interests are Antamina in Peru (33.75%, copper and zinc), Resolution Copper in Arizona (45%, operated by Rio Tinto) and Vicuña on the Argentina–Chile border (50%, with Lundin Mining). - **Iron Ore.** WAIO (85% of the four main joint ventures) is an integrated system of four processing hubs and five open-cut mines in the Pilbara, with more than 1,000 km of rail and two port facilities at Port Hedland. BHP also holds 50% of Samarco in Brazil, which is operated independently and is restarting in phases after the 2015 Fundão dam failure. - **Coal.** BHP Mitsubishi Alliance (BMA, 50%) operates five steelmaking coal mines in Queensland's Bowen Basin and its own Hay Point export terminal. New South Wales Energy Coal (100%) is the Mt Arthur open-cut mine, where BHP plans to cease mining in June 2030. - **Group and unallocated.** This covers Potash: the Jansen project in Saskatchewan (100%). Stage 1 (4.15 Mtpa) was 84% complete at 30 June 2026, and Stage 2 adds a further 4.36 Mtpa. It also covers Western Australia Nickel, which has been temporarily suspended since December 2024 because of nickel oversupply. BHP will review that suspension by February 2027 and is assessing a possible divestment. The Antamina silver stream and legacy assets also sit here. **Strategy and capital allocation.** BHP's Capital Allocation Framework makes every growth option compete for capital and sets a minimum dividend payout of 50% of underlying attributable profit at each reporting period. The growth plan centres on copper. BHP's stated aspiration is attributable copper production of about 2 Mtpa (about 2.5 Mtpa copper-equivalent) by FY2035, roughly 40% above current attributable copper production, or about 5% a year of copper-equivalent growth from its copper business between FY2027 and FY2035. The two bases differ: the reported production figures (about 2 million tonnes, 1,953 kt in FY2026) include 100% of Escondida, in which BHP holds 57.5%, while the aspiration counts only BHP's attributable share. Projects in that plan: - **Escondida New Concentrator:** $5.4–6.3 billion for 230–270 ktpa of capacity, replacing the Los Colorados plant. Final investment decision is expected in calendar 2027–2028 and first production in calendar 2031–2032. - **Copper South Australia:** expansion pathways to about 500 ktpa in a first phase and up to 650 ktpa in a second. - **Vicuña:** a possible Stage 1 final investment decision as early as the end of calendar 2026. - **Spence:** two projects sanctioned in June 2026. In iron ore, BHP targets more than 305 Mtpa from WAIO (100% basis) by Q4 FY2028, supported by the approximately $0.9 billion (100% basis) Ministers North mine approved in June 2026. During FY2026 BHP also announced agreements to release $6.3 billion of capital from existing assets. These were the $4.3 billion Antamina silver stream with Wheaton Precious Metals and a $2 billion arrangement with Global Infrastructure Partners over BHP's share of WAIO's inland power consumption, which completed after year-end (see Subsequent events). --- ## Risk factors The 20-F groups BHP's risks into operational, strategic and sustainability-related themes. The substantive ones are: - **Operational events.** Geotechnical failures, fires, transport incidents, hazardous-material releases and extreme weather can harm people and stop production. Tropical storms affected BMA and WAIO in FY2026. Growing mine complexity and declining grades make resource definition and mine planning harder. Supplier failures are a live exposure: Middle East tensions have begun to affect the supply of ammonia, construction materials, diesel and aviation fuel. Protected industrial action took place at WAIO in FY2026 following changes to Australian industrial relations law. - **Key infrastructure failure.** BHP depends on tailings and water storage facilities, concentrators, car dumpers, ship loaders, rail and ports, some of them shared. A blockage of the Port Hedland channel, for example, would cut off WAIO's route to customers. Insurance may not cover the full loss. - **Cybersecurity.** BHP's operational technology is a target, and the 20-F specifically flags AI-enabled phishing, deepfakes and compromised AI agents. Attacks on cloud providers and other vendors could also disrupt production or shipping. - **Portfolio strategy and project delivery.** Commodity prices are volatile and can be distorted by tariffs, export controls and state stockpiling of critical minerals. Large projects can overrun on cost and schedule, and Jansen is a current example (see MD&A). Permits can be renegotiated and royalties raised; the 20-F cites Queensland's 2022 coal royalty increase. Australia's "Same Job, Same Pay" and related industrial relations reforms raise labour costs and the risk of industrial action. In joint ventures BHP does not control, outcomes depend on its partners. - **Access to markets.** Sanctions, tariffs, port or shipping disruption, and carbon-related import measures could cut sales volumes or force BHP to accept lower prices. The customer base is concentrated: China took about 58% of FY2026 revenue. - **Community and Indigenous peoples.** Real or perceived harm to water, cultural heritage or Indigenous rights could delay growth projects and weaken BHP's licence to operate, especially in the Pilbara, South Australia, South America, the US and Canada. Losing stakeholder support could also bring class actions. - **Environment and climate.** Environmental damage, unauthorised clearing, tighter climate and nature regulation, and physical climate risks could raise costs, restrict access to land or resources, or create legacy liabilities. - **Ethics and compliance.** BHP faces risks from fraud, corruption, breaches of sanctions or export controls, failures of continuous disclosure, and workplace harassment. Exposure may rise as BHP pursues early-stage copper options and partnerships in jurisdictions where governance controls are less mature. **Price sensitivity.** On FY2026 figures, each US¢1/lb change in the copper price moves Underlying EBITDA by about $39 million, and each $1/t change in the iron ore price moves it by about $230 million. A $1/t change moves EBITDA by about $12 million for steelmaking coal and about $15 million for energy coal. **Samarco and other legal exposures.** The 2015 Fundão dam failure at Samarco remains BHP's largest legal liability. - **Provision.** BHP Brasil's Samarco provision stood at $5.20 billion at 30 June 2026, down from $5.85 billion. During the year $2.03 billion was used and $575 million was added through a change in estimate. - **Brazil settlement.** Under the October 2024 settlement with Brazilian public authorities, Samarco is the primary obligor. BHP Brasil and Vale are each secondary obligors for 50% of anything Samarco cannot fund. BHP Brasil has approved up to $1.3 billion of preliminary funding to Samarco for calendar 2026. - **UK group action.** In November 2025 the English High Court found BHP liable under Brazilian law as a "polluter" and at fault under the Brazilian civil code. BHP was refused permission to appeal. The court also upheld certain waivers, and at least 240,000 claims are expected to be discontinued as a result. A stage 2 trial on causation and quantification is scheduled for April 2027 to March 2028, and a stage 3 trial on individual damages is unlikely before 2029. Under a July 2024 agreement, Vale bears 50% of any amount payable. BHP warns that outcomes could be materially higher or lower than the amount provided. - **Other Samarco matters.** Prosecutors are appealing the November 2024 acquittal of the companies on criminal charges. A Dutch collective action is pending against Vale and a Samarco subsidiary (BHP is not a defendant). The Australian shareholder class action was settled for $74 million, with no admission of liability; insurers paid $64 million. - **Contingent liabilities.** Group contingent liabilities totalled $3.06 billion at 30 June 2026. Outside Samarco, BHP faces an uncertified South African coal-dust class action (BHP considers any liability indemnified by South32) and an Australian sexual harassment and discrimination class action at an early stage. --- ## Management's discussion of FY2026 results **Headline results.** Higher copper, iron ore and steelmaking coal prices drove a strong year. - **Revenue:** $58.76 billion, up $7.50 billion or 15%. The rise was partly offset by lower volumes at Escondida (planned grade decline) and Spence (complex ore). - **Underlying EBITDA:** $32.95 billion, up from $25.98 billion. - **Profit after tax:** $13.03 billion, up from $11.14 billion. - **Profit attributable to BHP shareholders:** $9.83 billion, up from $9.02 billion. This is after an exceptional loss of $3.37 billion: a $2.3 billion Jansen impairment and $1.1 billion of Samarco dam failure impacts. - **Underlying attributable profit:** $13.20 billion, up from $10.16 billion. - **Earnings per share:** basic $1.936 (193.6 US cents), against $1.778. Underlying EPS was 260.0 US cents, against 200.2. - **Underlying return on capital employed:** 26.1%, up from 20.6%. **What moved Underlying EBITDA** (FY2025 $25.98 billion to FY2026 $32.95 billion): - **Prices:** +$7.71 billion from higher realised prices, less $0.40 billion of higher price-linked royalties. - **Volumes:** –$1.17 billion. Lower volumes at Escondida, Spence and Copper SA (planned grade decline, plus complex ore at Spence) outweighed gains at NSWEC, BMA and WAIO. - **Controllable cash costs:** +$1.19 billion, mostly favourable inventory movements and the absence of FY2025's one-off Escondida labour costs. - **Exchange rates, inflation and fuel:** –$0.80 billion, –$0.68 billion and –$0.21 billion respectively. - **Non-cash:** +$0.10 billion, from higher stripping capitalisation at Escondida. - **Asset sales:** +$0.10 billion. - **Ceased and sold operations:** +$0.48 billion, primarily from Western Australia Nickel's move into temporary suspension in December 2024. - **Other:** +$0.64 billion, including higher Antamina profit. **Costs, finance and tax.** Expenses excluding net finance costs rose $3.7 billion (11%) to $36.0 billion. Besides the Jansen impairment, the increases were third-party commodity purchases (+$1.2 billion), depreciation on newly capitalised assets (+$0.7 billion) and wage and materials inflation (+$0.6 billion). These were partly offset by $1.5 billion of favourable inventory movements. Net finance costs rose 31% to $1.5 billion, mainly because inflation increased the unwinding of discount on provisions. Tax expense rose 30% to $9.4 billion on higher profits. **Segments.** - **Copper.** Revenue was $29.03 billion (FY2025: $22.53 billion) and Underlying EBITDA $18.19 billion (FY2025: $12.33 billion). The average realised price rose from $4.25/lb to $5.74/lb. Production fell 3% to 1,953 kt. - Escondida fell 3% to 1,261 kt as concentrator feed grade dropped from 1.02% to 0.90%, despite record material mined and throughput. - Spence fell 21% to 213 kt on complex ore. - Copper SA rose 2% to 321 kt, with a 20-year record at Olympic Dam and record gold. - Antamina rose 27% to a record 152 kt. - Unit costs: Escondida $1.07/lb, Spence $2.15/lb, Copper SA $0.32/lb (down from $1.18, helped by by-product credits). - **Iron Ore.** Revenue was $23.88 billion and Underlying EBITDA $14.53 billion (FY2025: $14.40 billion). The realised price was $84.56/wmt (FY2025: $82.13). Production reached a record 265 Mt; WAIO produced a record 257 Mt, and South Flank exceeded nameplate capacity. WAIO unit costs rose to $19.66/t from $18.56/t. Underlying EBITDA rose only $0.1 billion because a $0.5 billion hit from inflation and unfavourable exchange rates offset most of the $0.4 billion net price gain and $0.2 billion of cost improvement. Samarco production rose 25% to 7.8 Mt (BHP share). - **Coal.** Revenue was $5.59 billion and Underlying EBITDA $0.83 billion (FY2025: $0.57 billion). BMA produced 18.6 Mt, up 3%, at a realised $210.21/t and a unit cost of $134.05/t. BMA placed Saraji South into care and maintenance in December 2025. NSWEC produced 16.4 Mt, above its guidance, at $104.28/t. - **Other.** Potash recorded an Underlying EBITDA loss of $326 million and Western Australia Nickel a loss of $255 million. **Jansen cost reset.** In January 2026 BHP raised the Jansen Stage 1 estimate to $8.4 billion from the $7.0–7.4 billion range given in July 2025, citing inflation, design changes, scope changes and lower productivity. In June 2026 it raised Stage 2 to about $6.9 billion from $4.9 billion, with first production in late FY2031. Because capital intensity is higher across the project, BHP recognised a $2.3 billion non-cash impairment, with no tax effect. Stage 1 remains on track for first potash in mid-calendar 2027. **Cash flow and balance sheet.** - **Operating cash flow:** $21.78 billion, up $3.1 billion. - **Investing cash flow:** $12.01 billion outflow, down $1.3 billion, because FY2025 had included the $2.1 billion Vicuña acquisition. Capital and exploration expenditure was $10.26 billion. - **Financing cash flow:** $3.28 billion outflow. This included the $4.3 billion Antamina silver stream proceeds, which BHP accounts for as a financial liability. - **Net debt:** fell $4.2 billion to $8.69 billion (FY2025: $12.92 billion). Gearing fell to 13.4% from 19.8%. - **Gross debt and cash:** gross debt rose $2.6 billion to $27.1 billion and cash to $18.5 billion. In FY2026 BHP issued two euro bond tranches (3.18% due 2031 and 3.643% due 2035), US bonds of $500 million (5.00%, due 2036) and $1.0 billion (5.750%, due 2055), and an $850 million five-year term loan. It repaid $1.0 billion of 4.875% notes and $323 million of 6.42% notes. - **Liquidity:** the $5.5 billion revolving credit facility, now maturing July 2031, is undrawn. Group-level borrowings carry no financial covenants. Ratings are unchanged at A1/P-1 (Moody's) and A/F1 (Fitch). **Silver stream terms.** The Wheaton Precious Metals stream took effect on 1 April 2026, and the $4.3 billion upfront payment was received on 2 April 2026. BHP will deliver the equivalent of 33.75% of Antamina's silver output (at a fixed 90% payable rate), falling to 22.5% after 100 million ounces. It receives 20% of the spot silver price per ounce delivered, and settles via metal credits rather than physical silver. **Dividends.** Dividends determined for FY2026 total $1.72 per share, or $8.7 billion. This comprises a $0.73 interim and a $0.99 final dividend; the final includes $0.30 above the $0.69 policy minimum and is equivalent to a 72% payout ratio. For the full-year dividend the payout ratio is 66% (Annual Report 2026, furnished on Form 6-K, accession 0001193125-26-355840). FY2025's total was $1.10 per share. **Other portfolio moves in FY2026.** BHP completed the sale of its Carajás copper assets in Brazil to a subsidiary of CoreX Holding on 2 April 2026, for proceeds of $0.2 billion. It disposed of its SolGold stake after Jiangxi Copper took SolGold over in March 2026. It made a private-placement investment in Faraday Copper in March 2026 (see Subsequent events). **Leadership.** On 18 March 2026 the Board appointed Brandon Craig, then President Americas, as Chief Executive Officer from 1 July 2026. Mike Henry retired on 30 June 2026 after six and a half years as CEO. **FY2027 guidance** (20-F and the Annual Report 2026 furnished on Form 6-K): - **Copper:** 1,650–1,800 kt, mainly reflecting grade decline at Escondida. By asset: - Escondida 1,000–1,100 kt (feed grade about 0.70%) - Spence 210–230 kt - Copper SA 290–320 kt - Antamina 120–140 kt - **Iron ore:** 260–272 Mt in total; WAIO 253–264 Mt (286–298 Mt on a 100% basis), including the renewal of Car Dumper 4 in H1 FY2027. Samarco 7.5–8.0 Mt. - **Coal:** BMA 18.5–20.5 Mt, weighted to the second half; NSWEC 14–16 Mt. - **Unit costs:** - Escondida $1.20–1.50/lb - Spence $2.40–2.70/lb - Copper SA $0.30–0.80/lb - WAIO $20.25–21.75/t - BMA $126–137/t - **Capital and exploration expenditure:** about $11 billion in FY2027 and FY2028. - **Samarco settlement cash outflow:** about $0.9 billion in FY2027 and about $0.5 billion in FY2028. --- ## Current period: the June 2026 quarter and second half of FY2026 BHP files no quarterly reports on Form 10-Q. Its latest-period disclosure is the Operational Review dated 16 July 2026 (Form 6-K, accession 0001193125-26-306705), which reports production and preliminary prices for the June 2026 quarter (Q4 FY2026). Output rose quarter on quarter across all four commodities: - **Copper:** 491.9 kt, up 3% on Q3 but down 5% on the June 2025 quarter. Cathode output was higher at Escondida and Spence and Copper SA produced record concentrate, partly offset by lower Antamina throughput. - **Iron ore:** 68.1 Mt, up 8% on Q3, as WAIO recovered from wet weather and planned maintenance. Output was down 3% year on year. - **Steelmaking coal:** BMA produced 5.7 Mt, up 48% on Q3 and 10% year on year, as stripping recovered after Tropical Cyclone Koji and the Broadmeadow longwall move was completed. - **Energy coal:** NSWEC produced 4.2 Mt, up 4% on Q3. Prices strengthened through the second half. The realised copper price was $6.53/lb in Q4, up 11% on Q3 and 47% on the prior-year quarter; the second-half average was $6.21/lb. Steelmaking coal averaged $232.88/t in Q4 and energy coal $117.74/t. Iron ore eased to $83.58/wmt. At 30 June 2026, 429 kt of copper sales were still provisionally priced, revalued at $6.07/lb, with final prices to be set in FY2027. At guidance exchange rates, BHP expected FY2026 unit costs to land at the bottom end of guidance for all three operated copper assets, within guidance at WAIO and towards the top end at BMA. Prominent Hill ended the year holding extra concentrate after wet-weather logistics problems in Q3, and BHP expects to sell it in H1 FY2027. The balance sheet strengthened sharply in the second half. Net debt fell from $14.7 billion at 31 December 2025 to $8.7 billion at 30 June 2026, and gearing from 20.9% to 13.4% (FY2026 results announcement, furnished on Form 6-K with the Annual Report 2026, accession 0001193125-26-355840). The $4.3 billion Antamina silver stream payment was received in the same half, on 2 April 2026. Net debt is now below BHP's $10–20 billion target range. --- ## Subsequent events These events occurred after the 30 June 2026 balance date. - **Global Infrastructure Partners partnership over WAIO power (completed 18 August 2026).** BHP completed a transaction in which Global Infrastructure Partners (GIP) provided $2 billion of funding for a 49% stake in a partnership tied to BHP's share of WAIO's inland power consumption. It was done as a new UK transaction with the same commercial effect as the agreement announced on 9 December 2025, which was terminated. BHP keeps full operational control of WAIO, including its inland power infrastructure, and the deal does not affect ownership of any WAIO assets. This transaction is the matter disclosed in note 33 "Subsequent events" of the FY2026 20-F. - **San Manuel to Faraday Copper (definitive agreements signed July 2026; pending).** BHP signed definitive agreements under which Faraday Copper Corp acquires BHP's legacy San Manuel asset in Arizona in exchange for a 30% equity interest in Faraday on a fully diluted basis; no cash consideration is disclosed. Faraday plans to combine San Manuel's infrastructure and mineral inventory with its adjacent Copper Creek project. Together with shares BHP bought in a March 2026 private placement, BHP's holding in Faraday will rise to about 32.5% on a non-diluted basis at completion. Completion was expected in Q1 FY2027 (July–September 2026), subject to customary conditions, and none of the filings reviewed reports that it has closed. (Operational Review, accession 0001193125-26-306705; FY2026 results announcement, furnished on Form 6-K with the Annual Report 2026, accession 0001193125-26-355840.) - **Fatality at BMA (24 July 2026).** A contractor was killed at BMA's Peak Downs mine in Queensland. An investigation is under way. - **Carrapateena conveyor failure (July 2026).** The underground conveyor belt at Carrapateena failed unexpectedly. No one was injured, but a replacement belt is needed and BHP expects up to eight weeks of lost mine production. This is reflected in Copper SA's FY2027 guidance of 290–320 kt. - **Port Hedland industrial action.** After 30 June 2026, a small number of Port Hedland employees took protected industrial action organised by the AMWU, ETU and AWU. Bargaining for a new enterprise agreement continues into FY2027. - **Final dividend.** On 18 August 2026 the Board determined a final dividend of $0.99 per share ($5.0 billion), with a 4 September 2026 record date and a 23 September 2026 payment date. The dividend reinvestment plan applies. - **Leadership changes.** Brandon Craig became CEO and a Director on 1 July 2026. Jessica Farrell became President North America and acting President South America on 1 July 2026. From 1 September 2026, Geraldine Slattery's role as President Australia also covers Copper SA, and Edgar Basto moved to Chief Enterprise Performance Officer. - **WAIO partnership speculation.** In a release furnished on Form 6-K on 8 September 2026 (accession 0001193125-26-383926), BHP responded to media reports of a possible partnership involving part of WAIO. It said it regularly explores value-creating options and that WAIO "remains central to BHP's portfolio". It did not confirm or deny a transaction. - **Pending Samarco milestones.** The prosecutors' appeal against the criminal acquittal was adjourned to 3 September 2026, and no outcome appears in the filings reviewed. The Dutch court has provisionally indicated it will rule on jurisdiction in the Netherlands collective action against Vale and Samarco's subsidiary on 14 October 2026. - **Annual General Meeting.** The 2026 AGM is set for 22 October 2026 (notice furnished on Form 6-K, accession 0001193125-26-391223). Shareholders will vote on electing Brandon Craig and Mark Vassella (a Non-executive Director since 1 June 2026) and on a candidate the Board does not endorse, Stephen Mayne.