BHP CFO Vandita Pant on dividends, copper growth, and the next 18 months

BHP Group's (ASX: BHP) latest results highlight a standout operational year, with copper now contributing more than half of group earnings for the first time. 

The company also declared a full-year dividend of US$8.7 billion, its highest in four years, with an FY26 payout ratio of 66%, well above the 50% minimum and exceeding analyst expectations of 63%, supported by strong cash generation, tight cost control, and higher copper and iron ore prices.

Operationally, BHP delivered almost 2 million tonnes of copper for the second consecutive year, record iron ore production and shipments in Western Australia, and maintained its position as the lowest-cost iron ore producer globally for the seventh year running.

I spoke with Chief Financial Officer Vandita Pant to talk more about the results and what it means for investors, and what comes next.

The dividend beat

When I asked Pant what pushed the dividend payout above the 50% floor and even above consensus, she pointed to two things: strong operating cash flow off the back of a 35% rise in copper prices and 3% higher iron ore prices, and roughly US$6 billion unlocked from existing assets, including a silver streaming deal at Antamina with Wheaton Precious Metals.

"Both of those things together led us to declare the dividend, which is highest in four years," she said. "And given the cash flow generation capacity of this business and good balance sheet strength as well, we are very confident to be able to continue to have attractive shareholder returns along with high quality growth."

Balance sheet strength

With net debt at US$8.7 billion, well below BHP’s own target of US$10–20 billion, the balance sheet is in its strongest position in years. Pant says that even at consensus commodity prices, which are below current spot levels, BHP expects to keep generating significant free cash flow.

"BHP will have $35 billion of attributable free cash flow after we have invested in the whole growth plan over the next five years."

That plan involves funding the entire copper and potash growth programme. It also means that the copper growth plan is expected to be entirely self-funded from copper's own cash flows.

Copper's next phase

Where pretty much every major copper producer is struggling to grow, BHP is guiding to a 50% increase in copper production by the mid-2030s. When I asked Pant where that confidence comes from, she pointed to copper project maturity and track record.

“The confidence comes both on track record, but also very diligently continuing to work on these things," Pant said.

BHP has met or beaten its copper production guidance for five consecutive years. And in the next 12-18 months, three major copper projects are approaching final investment decisions. They are:

Vicuña, Argentina: Environmental permits are secured, the RIGI regulatory framework has been awarded, and a final investment decision could come by the end of this calendar year. Once ramped up, it's expected to rank among the top five copper and gold producing assets in the world.

Copper South Australia: Olympic Dam had its best production year in two decades, with total copper output from the portfolio reaching 320,000 tonnes. The smelter and refinery investment decision is less than 18 months away, with a phase one target of more than 500,000 tonnes and a potential second phase lifting output to 650,000 tonnes.

Escondida, Chile: Environmental permit submissions are in, the concentrator scope is finalised, and pre-commitments are underway. A final investment decision is expected next calendar year.

Looking ahead

Reflecting on what improvements could have been made in FY26, Pant named project execution as the area requiring the most deliberate attention in FY2027.

"The BHP operating system binds that together and enables that to happen. And that has been the reason for our outperformance on cost, on production, on our track record of delivery for these many years across operations. 

"And that is going to be our focus to improve our projects even further by embedding BHP operating system in our pipeline of projects."

The Jansen potash project, not discussed in this interview, has already seen cost estimates rise from US$7 billion to US$8.4 billion for Stage 1 alone, with a US$2.3 billion impairment taken in FY2026.