BHP Q1 update: steady guidance, stronger prices, focus on safety

BHP (ASX: BHP) expanded its Olympic Dam mineral resource, aiming to increase copper production to 500,000 tonnes annually by 2035. The update includes a new underground block-cave resource of 10.73 billion tonnes, with 88.1 million tonnes of copper. BHP maintained production guidance despite a quarterly decline in copper output. The company also approved $800 million for the Escondida New Concentrator in Chile.

BHP Group reported a 24% drop in copper output to 375,000 tons in Q3, citing disruptions at its Escondida mine. Despite this, the company maintained its full-year guidance, suggesting it expects to recover lost production. Investors may focus on potential cost increases due to production challenges.

BHP Group reported a 19% drop in copper production in Q1 FY2027 due to maintenance and disruptions, but stronger commodity prices, including a 53% rise in copper prices, supported earnings. Iron ore production rose 4%, and coal output increased. BHP maintained its annual production and cost guidance.

BHP Group agreed to sell its Kambalda Nickel Concentrator to Gold Fields, part of restructuring its Western Australia nickel business. The deal, pending approval, is set to close by 2027. BHP's nickel operations remain under review, with potential options including divestment or closure. Gold Fields plans to assess the acquired assets for gold and nickel processing. BHP reported a $255 million EBITDA loss for Western Australia Nickel in fiscal 2026.

BHP lost its appeal against a court order to pay 90% of trial costs plus interest in the Mariana dam case. The UK Court of Appeal upheld the order, stating it compensates for the time value of money. The case involves 450,000 claimants affected by the 2015 dam collapse. A damages trial is set for next year, with £43 million paid on account.

BHP completed the sale of its historic San Manuel mine in Arizona to Faraday Copper on 6 October 2026. BHP holds a 30% equity stake in Faraday. Faraday plans to redevelop the site alongside its Copper Creek project, aiming to meet growing demand for domestically produced copper. The San Manuel mine historically produced 4.65 million tons of copper.