BHP Profits Fall as Iron Ore Prices Slide

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Australian mining giant BHP has reported a significant decline in profits for the 2025 financial year, citing lower iron ore and coal prices as the main factor.

The ASX-listed company announced underlying profits of US$10.2 billion (A$15.7 billion), down 26 per cent from the previous year. Total revenues fell 8 per cent to US$51.3 billion (A$79 billion), while underlying earnings before interest, tax, depreciation, and amortisation dropped 10 per cent to US$26 billion (A$40 billion).

Statutory profit, which includes one-off items, rose 14 per cent to US$9 billion (A$13.8 billion). BHP operates major mining projects across Australia and Chile, focusing on iron ore, coal, and copper. Iron ore and coal prices are closely tied to Chinese demand for steel, which contributed to the revenue decline.

The company’s average realised price for its Pilbara iron ore fell to US$82.13 per tonne from US$101.04 in 2024. Iron ore remains the largest contributor to BHP’s earnings.

Despite the revenue and profit falls, CEO Mike Henry described the results as “a strong performance.” He highlighted record production, sector-leading margins, and disciplined capital allocation as key achievements. Safety metrics also improved year-on-year.

BHP declared a final dividend of 60 cents per share. The company plans to invest US$17 billion annually in capital and exploration over the next two years, before reducing spending to approximately US$15.4 billion per year from FY28 to FY30. Planned investments include expanding copper production in Chile and South Australia, developing a new potash mine in Saskatchewan, Canada, and sustaining iron ore production in Western Australia above 305 million tonnes annually. In 2025, Pilbara production reached 290 million tonnes.

Copper prices provided a boost, with underlying earnings in the division rising 44 per cent to US$19 billion. In South Australia, BHP aims to increase copper output from 316,000 tonnes to over 500,000 tonnes annually.

In its economic outlook, BHP cited supportive Chinese policy as a stabilising factor for global demand. CEO Henry warned of a “mixed” global economic outlook, with near-term growth expected around 3 per cent. However, demand for commodities remains strong, particularly in China and India. Steelmaking coal prices have softened due to oversupply, but policy shifts in China and new blast furnace capacity in Asia are expected to support the market.

BHP’s results were broadly in line with market expectations, reflecting resilience in its core operations despite commodity price fluctuations.