BHP lifts copper outlook, seals China iron ore deal

TL;DR

BHP Copper Update: BHP expects fiscal year copper production through June 2026 in the upper half of its 1.9 million to 2.0 million metric ton guidance range.[[1]](https://www.wsj.com/business/bhp-expects-annual-copper-output-in-upper-half-of-guidance-a38bf12e)[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
Escondida Costs Cut: Unit costs at the Escondida mine in Chile now guided to $1.00 to $1.20 per pound, down from $1.20 to $1.50 per pound.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
China Iron Deal: BHP concluded iron ore sales contract talks with China Mineral Resources Group after months of negotiations.[[1]](https://www.wsj.com/business/bhp-expects-annual-copper-output-in-upper-half-of-guidance-a38bf12e)[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

The story at a glance

BHP Group, the world's biggest miner by market value, upgraded its copper production outlook to the upper half of guidance in its quarterly operational review. The company also confirmed it has wrapped up long-term iron ore supply contract negotiations with China's state-owned buyer after a months-long standoff. This comes as BHP reported nine-month copper output down 3% to 1.46 million tons but anticipates a strong finish at key assets like Escondida.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Key points

Copper production for the first nine months of fiscal 2026 fell 3% year over year to 1,461 kt, with Q3 at 477 kt, down 3% from prior quarter.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
Full-year group copper guidance unchanged at 1,900-2,000 kt but now expected in upper half; Escondida skewed to upper half of 1,200-1,275 kt.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
Escondida hit records in material mined and concentrator throughput despite 3% production drop to 949 kt; unit costs lowered to $1.00-$1.20/lb.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
Antamina copper guidance raised to 150-160 kt on higher grades; Spence lowered to 210-220 kt due to ore challenges.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)
Iron ore output up 2% to 197 Mt over nine months; full-year guidance steady at 258-269 Mt, with sales contract talks concluded with China Mineral Resources Group.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Details and context

BHP raised the low end of its copper guidance to 1.9-2.0 million tons three months earlier, from 1.8-2.0 million tons, citing strong performance at assets including Escondida.[[1]](https://www.wsj.com/business/bhp-expects-annual-copper-output-in-upper-half-of-guidance-a38bf12e) The latest update to the upper half reflects offsetting factors: records at Escondida from higher throughput, gains at Antamina from better grades, against weakness at Spence from complex ore and lower grades at Pampa Norte.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

The Escondida cost reduction stems from operational improvements amid elevated diesel and consumables prices across the industry. BHP submitted permits for a $4.4-5.9 billion new concentrator there, aiming for first output in fiscal 2032.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Iron ore negotiations with China Mineral Resources Group had restricted some purchases since last year over 2026 contract pricing; conclusion removes that overhang, with Western Australia Iron Ore (WAIO) hitting production records.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Key quotes

“BHP has delivered strong performance over the past nine months, including record material mined and concentrator throughput at Escondida and record production at WAIO.” — Mike Henry, BHP Chief Executive Officer.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Why it matters

Copper output signals underpin BHP's pivot to the metal as its biggest earnings driver, amid demand from electrification and supply constraints. Investors gain from cost cuts at Escondida, the world's largest copper mine, and resolution of the China iron ore contract that secures sales to the top buyer. Watch Q4 production execution and any FY27 guidance updates in July, given asset-specific risks like Spence ore issues.

What changed

Guidance was 1.8-2.0 million tons until three months ago, then raised to 1.9-2.0 million tons; now full year expected in upper half of that range. Escondida unit costs previously guided at $1.20-$1.50/lb, now $1.00-$1.20/lb. Reported April 22, 2026, in quarterly review.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

FAQ

Q: What caused the nine-month drop in BHP's copper production?

A: Output fell 3% to 1,461 kt due to lower grades and weaker performance at Escondida and Spence, partly offset by strong results at Antamina and Copper South Australia. Q3 production was 477 kt, with Escondida down from record throughput but lower grades. The company still eyes upper-half full-year delivery.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Q: Why did BHP lower Escondida unit cost guidance?

A: Record material mined and concentrator throughput improved efficiencies despite industry cost pressures from diesel and consumables. Guidance shifted from $1.20-$1.50/lb to $1.00-$1.20/lb for fiscal 2026. Production holds at upper half of 1,200-1,275 kt.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Q: What is the status of BHP's iron ore deal with China?

A: BHP concluded sales contract negotiations with China Mineral Resources Group after months of talks that included purchase restrictions. Iron ore nine-month output rose 2% to 197 Mt, with full-year guidance unchanged at 258-269 Mt. WAIO hit production records.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)

Q: How has guidance changed for other copper assets?

A: Antamina raised to 150-160 kt from 140-150 kt on higher grades; Spence cut to 210-220 kt from 230-250 kt due to ore complexity. Copper South Australia steady at 310-340 kt, weighted to second half. Group copper unchanged but upper half expected.[[2]](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2026/260422_bhpoperationalreviewfortheninemonthsended31march2026.pdf)