An insider's guide to BHP's future growth plans: Potash in, Nickel out

BHP Group released its first-half results on Tuesday, with the mining giant's share price falling 4% on the back of an 86% profit plunge.

Net profits were impacted by two "exceptional items" - one, relating to BHP's Nickel West business - which lost around US$173 million on the EBITDA line on the back of supply growth out of Indonesia, and the other, an impairment relating to its settlement from the Samarco Dam failure in Brazil.

But as BHP Group Chief Financial Officer David Lamont told Livewire on Tuesday, operational performance remains strong.

As Lamont explains, BHP Group's two main commodities - Iron Ore and Copper - saw price rises of around 21% and 5% respectively, contributing to strong operating cashflows and helping BHP beat estimates. It also declared a US$0.72/share interim dividend.

In this interview, Lamont maintains BHP's commitment to a 50% minimum payout ratio and outlines why he believes iron ore prices are sustainable at these levels - despite a shortfall in demand for Chinese real estate.

He also provides his outlook for BHP's Nickel, Copper and Potash businesses, shares why BHP will never have Lithium assets in the portfolio and outlines which segments are the most exciting growth opportunities for the Big Australian over the coming few years.

Timecodes:
0:00 - Intro
0:27 - Key figures from BHP's latest result
1:35 - Impact of "exceptional items" on BHP's H1 earnings
3:06 - Good news for dividend lovers: BHP committed to a 50% payout ratio
4:23 - Iron Ore to contribute to the lion's share of BHP's earnings in H2
5:24 - Sustainability of iron ore prices at current levels
6:17 - China's impact on BHP's earnings
7:34 - Nickel assets writedown and the outlook for Nickel prices from here
9:23 - Where BHP is investing for growth: Copper and Potash
10:53 - BHP focused on operational performance and early-stage opportunities
12:44 - Potash business in Canada a "really good growth avenue"

[detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊

[Tim_in_Australia]

Great interview. I respect BHP. Their strategy is superb over the decades ahead.

[terricassin]

ESG- why have you not fully compensated the people impacted by your tailings mine failure which was the direct result of poor maintenance. 19 people died, hundreds left homeless, arable land destroyed and rivers contaminated for over 60kms. You rebuilt roads and bridges- clearly advantaging yourselves yet 8 years on you are still penny pinching over your responsibilities. Many of these farmers were in their 80.s at the time. You have removed a lake, re routed rivers ("hydrological adjustments") and failed to revegetate land to the standard promised. Stop "negotiating" with a corrupt govt and start working one on one with the people impacted including future implications due to water poisoning along way down stream. In any country you work in you must use 'gold standard' methodologies as you would in a western nation. Profits must not be at the expense of others and the environment, a voiceless participant.