Global mining giant BHP has announced a substantial increase in its investments, committing $104 million to exploration and evaluation expenditure during the quarter ending September 2024.
This represents a notable rise from the $93m allocated in the same period the previous year. Of this recent commitment, approximately $91m has already been expensed, indicating robust momentum in ongoing projects.
As BHP progresses, the company has also revealed plans to direct over $300m towards the operation of its burgeoning potash ventures throughout the financial year, set to conclude in June 2025.
The lion’s share of this funding is earmarked for the first and second stages of its Jansen potash project located in Canada, which is projected to produce an impressive 8.5 million tons annually.
Stage 1 of the Jansen project is now 58% complete, with first production scheduled for 2026. The second stage of the project is currently about 4% complete and first production is scheduled for 2029, said BHP yesterday.
BHP is evidently laying the groundwork for a significant contribution to the agricultural sector as global demand for potash—an essential crop nutrient—continues to rise.
BHP’s diversified investment strategy comes on the back of strong operational performance across its commodity portfolio.
The company reported a 2% increase in iron ore production, reaching 65m tons, and a notable 4% increase in copper production to 476 000 tons during the quarter.
“BHP had a strong start to the 2025 financial year, with production up across all major commodities for the quarter,” said BHP CEO, Mike Henry.
“Copper production was up 4% due to higher grade and recoveries at Escondida, and WAIO production was up 3% as we unlocked capacity by completing the debottlenecking work at the port.”
Copper was becoming a sought after commodity, with Duane Hope, a partner at Capital10X, saying new demand sources for copper included electrification and energy transition.
“New copper demand sources (include) electrification” with copper seen as a “big driver of net zero in transport, smart grids” among others.
Digital demand via AI related industries has also emerged as a demand driver for copper, he added, saying: “Traditional vs energy transition vs digital split of global demand is now ~ 92%/7%/1%. By 2050, the split may be 71%/23%/6%.5.”
For BHP, the Escondida operation had delivered an 11% rise in copper output during the quarter to 304 000 tons, with the increased production attributed to “a higher concentrator feed grade of 1.00% and higher recoveries as mining progressed into areas” of higher-grade ore.
Copper South Australia also chipped in with a 2% firming up in output at 73 000 tons.
BHP’s outlook for iron ore production remains steadfast, with guidance for 2025 set between 255 million tonnes and 265.5 million tonnes.
This comes amidst China’s recent announcement of a stimulus programme aimed at bolstering economic activity, which is expected to further enhance demand for iron ore—an essential component of steel making.
Henry said he expected any additional stimulus by China to focus on providing relief to local debt.
“China has announced a series of monetary easing policies in an effort to support economic growth, and has indicated more significant fiscal stimulus is on the horizon. Upcoming stimulus is likely to focus on relieving local debt, stabilising the property market and bolstering business confidence,” he said.
BHP’s production of steelmaking coal was also stabilising, added Henry.
The company’s production of steelmaking coal increased by 20%, with BMA producing 4.5m tons during the quarter. The higher production has been attributed to “increased stripping enabled by improved truck productivity as well as Q1 FY24 being impacted by the extended longwall move” at Broadmeadow.
“We are also seeing signs of stabilisation in our steelmaking coal business with production up 20% in the quarter, excluding the recently divested Blackwater and Daunia mines,” said Henry.