Henry says BHP has no plans to become copper pure play

Speaking at the BMO Global Metals, Mining and Critical Minerals Conference in February, Henry said BHP's deliberately diversified portfolio remained a core strategic advantage, underpinning resilient cash generation and consistent shareholder returns through commodity cycles.

“BHP is, intentionally, a diversified miner – rather than a pure play. And although we are the world’s largest copper miner, we have exciting, high value copper growth ahead of us, we don’t aspire to be a copper pure play,” he said.

Henry argued that diversification allowed BHP to both protect itself during downturns and outperform more narrowly focused peers when prices weaken.

“Our diversification is a strength. It enables us to deliver strong cash flow through the cycle. That supports both our investment in growth and our commitment to our shareholders to pay an attractive return. This consistency is key."

At spot prices, BHP expects to generate about $60-billion in attributable free cash flow over the next five years, after funding growth investments. Even under what Henry described as an “extreme, prolonged low-price environment” – based on the lowest prices seen across its commodities over the past three years and extrapolated forward – the company would still generate around $10-billion in additional free cash flow over that period.

“The stability of our cashflows, combined with our track record of operational excellence and hitting guidance, makes our growth uniquely bankable,” he said.

Henry reiterated that not all cash would be reinvested, pointing to BHP’s capital allocation framework, which includes a minimum 50% payout ratio for dividends and requires competing uses of capital to meet strict return thresholds.

“In fact, we have returned over $110-billion to shareholders via dividends, share buy-backs and demergers over the past decade. This represents above 60% of today’s market capitalisation,” he said.

Turning to growth, Henry highlighted the Vicuña joint venture with Lundin Mining in Argentina as a standout development opportunity.

“Our Vicuña joint venture with Lundin Mining … is advancing rapidly,” he said, noting that recent drilling had added another nine-million tonnes of contained copper to the district resource base – equivalent to “another one-and-a-half Josemarias”.

The project has applied for Argentina’s RIGI investment incentive scheme, which would provide 40 years of greater fiscal and regulatory stability if approved.

Henry said the staged development strategy remained unchanged, with a potential final investment decision on Stage 1 as early as the end of the calendar year.

“Once all three stages are fully developed, Vicuña has the potential to be a global top-five copper and top-five gold… producing asset,” he said.

In February, BHP and Lundin Mining published a preliminary economic assessment for Vicuña, which highlighted that the project could deliver an average of 400 000 t/y of copper, 700 000 oz/y of gold and 22-million ounces a year of silver over the first 25 full years of operation.

Over a ten-year peak period, copper output is projected to exceed 500 000 t/y, alongside 800 000 oz of gold and 20-million ounces of silver, or about 800 000 t/y of copper equivalent.

The initial mine life is estimated at more than 70 years, with life-of-mine production of about 22.3-million tonnes of copper, 37.2-million ounces of gold and 763-million ounces of silver, positioning Vicuña as a multi-generational asset.