Unlocking value at BHP

FY2026 was a strong and successful year for BHP, both operationally and financially, and our shareholders shared in this success.

Our dividend payment for FY2026 represented 66 per cent of our underlying earnings, significantly above the minimum 50 per cent we set as the floor through our CAF. It was made possible primarily through the strength of our operational performance and higher commodity prices, but also through identifying sharp, creative and innovative ways to release and redeploy undervalued capital across our portfolio.

The higher dividend was also paid at a time of increased investment in our copper and potash growth projects as we look to deliver on our commitment to deliver a 3–4 per cent per annum increase in attributable copper equivalent production over the period to the mid-2030s. And all this whilst continuing to ensure our balance sheet remains strong and within our net debt target range.

In this piece, I share how we allocate capital across our business and touch on two recent, innovative transactions we completed to release and redeploy capital within our business. I’ll also describe the framework that drives decision-making at BHP to ensure we are able to continue to invest in our growth projects whilst maintaining a strong balance sheet and continuing our commitment to pay attractive shareholder returns.

Why the CAF is our North Star

Our Capital Allocation Framework

In 2016, we introduced the CAF to guide decision-making in how we allocate capital within the company, namely between investments, dividends and maintaining a robust balance sheet. Today, it continues to instil discipline into the way we allocate capital and ensures we maintain a clear focus on maximising returns for our shareholders.

The strongest source of net operating cash flow in our business is our existing asset base, so the first thing we do under the CAF is invest in asset integrity. These are the investments needed to ensure we run a safe, reliable and more sustainable business. This typically includes investment in asset integrity, maintenance, infrastructure and decarbonisation.

Next, we test the balance sheet for robustness and assess net debt relative to our target range (currently US$10–20 billion). This is important in supporting our business to remain resilient through a wide range of macroeconomic and other headwinds and threats.

After ensuring adequate capital is invested in maintaining our assets and in driving balance sheet resilience, we then allocate a minimum of 50 per cent of our underlying earnings to our shareholders in the form of dividends. This gives our shareholders confidence that they will receive at least half of what we earn back in dividends. With the excess cash left, we have three choices: invest in growth, reduce debt further, or return more to shareholders.

In this way, our CAF instils a sense of discipline in how we allocate capital across the business. It provides a clear framework that ensures we can invest in our future growth, remain resilient and reward our shareholders with dividends. It also drives competition for capital inside BHP – ensuring every dollar we invest on behalf of our shareholders creates value and generates returns.

Unlocking US$4.3 billion from silver streaming

While our operating assets are our key source of value generation, we are always on the lookout for opportunities to improve how we utilise and deploy capital across the portfolio. That is, after all, the true intention of the CAF. A good example of this is our silver streaming agreement with Wheaton Precious Metals at Antamina.

BHP owns 33.75 per cent in the Antamina copper mine in Peru and is a non-operating joint venture partner. Antamina is one of the top 10 copper producing mines in the world, but it also produces a significant amount of silver as a by-product.

While silver is a valuable commodity, it is not core to our portfolio. This prompted us to ask whether there was a way to monetise the value today of the silver Antamina is yet to produce so that we could invest this capital back into growth and additional shareholder returns.

We found a way through a creative partnership – striking a silver streaming agreement with Wheaton Precious Metals. In exchange for US$4.3 billion, Wheaton will get a share of BHP’s equity share in Antamina’s future silver production.

At the time of the transaction, our share in Antamina was being valued at approximately US$4.5 billion by the market and included almost zero value associated with our share of Antamina’s silver within it. Through our silver streaming agreement with Wheaton Precious Metals, we received US$4.3 billion in upfront consideration for our share of Antamina silver. This, I think, is a powerful demonstration of the value we can unlock from identifying and redeploying underappreciated value that can sit within a portfolio as large as BHP’s.

This transaction was not only innovative and well timed (when silver prices were at a multi-year high) but was a sharp and dynamic way to unlock value from our capital base. It was a fantastic result for our shareholders.

Securing US$2 billion from power infrastructure

Our recently completed agreement with Global Infrastructure Partners for a stake of WAIO’s inland power consumption is another example where we identified and then redeployed undervalued capital.

We have invested significantly in our assets over many decades, and some of the infrastructure we have built – like WAIO’s inland power infrastructure – is currently highly attractive to infrastructure investors looking for stable, long-term returns.

So, we asked: is there a way to release value from the use of these assets at an attractive valuation while continuing to maintain strategic and operational control?

That’s exactly what we were able to do with one of the largest infrastructure investors in the world: GIP. Under our agreement, GIP paid US$2 billion in cash for a 49 per cent stake in a partnership. This will see BHP pay this entity a competitive tariff linked to WAIO’s power consumption over the next 25 years.

Importantly, we retain all decision rights and will have strategic and operational control to grow the network in line with the needs of the business. Some of the proceeds will go toward our high-returning growth projects and the balance has gone back to shareholders in the FY2026 dividend.

More to come

We see more opportunities to unlock further value from our asset base, but we will remain disciplined – only executing these transactions at the right price, at the right time and with the right partners and structures.

We’ve unlocked US$6.3 billion to date and have an ambition to unlock a total of US$10 billion in undervalued capital over time. Our CAF will continue to guide how this capital is utilised – strengthening our balance sheet, funding our high-quality growth and rewarding our shareholders with attractive returns.

Watch the full podcast here: