BHP (ASX:BHP) Group Ltd (LSE:BHP, ASX:BHP), the Aussie mining titan, is scheduled to report results on the evening of August 26 (Tuesday) with strategy to be a key theme predicts US bank Jefferies.
Expect the failed bid for Anglo American (JO:AGLJ) to figure prominently in the post-numbers discussion, it says.
Organic growth in copper, operational strategy in met coal, and the macro outlook, with a focus on risks to steel demand in China, will also feature suggests the US broker but M&A is likely to be the key topic of discussion.
“Acquisitions in copper are clearly a strategic priority for the company, and BHP has been the most active diversified miner in the ongoing M&A landscape in mining of late.”
While reported net debt is currently in the upper half of the company's previous target range of $5-15bn, Jefferies expects BHP to remain strategically active.
It does not expect BHP to revisit its bid for Anglo once the six-month standstill expires, but Canada-based operators and/or further consolidation of the Vicuña district may make strategic sense.
Copper’s importance is also increasing. BHP achieved its highest copper production in more than 15 years in this year just ended, driven by the highest production in four years at Escondida, record production at Spence, and integration of the OZ Minerals assets.
Based on guidance, production is expected to increase in 2024-25, before volumes at Escondida fall as a result of lower concentrator feed grades.
BHP has organic project options in copper to potentially replace the lower production, including possibly a new concentrator and the application of leaching technologies at Escondida.
Buy with a price target of 2,800p is the investment view.