BHP Group’s key iron ore and copper divisions are thriving, with second-quarter sales up 4% and 2% respectively. However, the capital investment in the Jansen potash project has caused shares to drop by 2%. Construction costs for Stage 1 are now estimated at USD 8.4 billion, with production expected to begin in mid-2027.

Stage 1 of the Jansen project is set to produce 4.1 million metric tons of potash by fiscal 2030. The capital expenditure for Stage 2 is now estimated at USD 6 billion, with full production delayed until fiscal 2034. Copper production guidance has been raised slightly, with Escondida unit cash costs expected to be USD 1.30 per pound.

Despite the Jansen project only accounting for 6% of BHP’s fair value estimate, shares are trading 9% above fair value. This increase is attributed to a surge in the copper price to historical highs of USD 6 per pound. The rise is due to supply challenges and optimism surrounding increased demand from various sectors.

Read more at Morningstar: BHP: Solid Iron Ore and Copper Volumes Overshadowed by Jansen Capital Expenditure Again Being Raised