Diversified mining major BHP remains optimistic about demand for its products, despite a decline in interim profit and ongoing global economic uncertainties.

CEO Mike Henry on Tuesday highlighted early signs of recovery in China, resilient economic performance in the US, and strong growth in India – a bright spot for commodity demand –  as key factors supporting demand.

However, the mining giant reported a 23% drop in attributable earnings for the half-year ended December 2024, falling to $5.08-billion. Revenue decreased by 8% year-on-year to $25.2-billion as a result of a decline in realised iron-ore and steelmaking coal prices.

BHP also slashed its interim dividend to 50c a share, down from 72c a year earlier.

The group’s iron-ore segment saw underlying operating earnings decline by 26% to $7.2-billion, as the average realised price fell to $81.11 a wet metric ton from $103.70 a year ago.

The company further warned that full-year iron-ore output from Western Australia would likely fall below the upper half of its guidance range of 282-million to 294-million metric tons, following disruptions caused by Tropical Cyclone Zelia last week. Unit cost expectations remain unchanged at between $18/t and $19.5/t.

Henry pointed out that Western Australia Iron Ore (WAIO) has been the lowest-cost major iron-ore producer globally for five years. Despite average inflation of 3.4% across Australia, WAIO maintained a C1 unit cash cost of $17.5/t during the half-year under review.

Over the medium term, BHP aims to grow WAIO production to 305-million tonnes a year, with the potential to reach 330-million tonnes a year if market conditions warrant an expansion.

BHP said global monetary easing could be a driver of demand growth for iron-ore and copper in the near term.

“Central banks’ ongoing rate cuts are expected to translate into a recovery for steel and copper demand across the OECD [Organisation for Economic Cooperation and Development] in the near term,” the company stated.

Trade tensions, however, could pose risks to recovery in developed economies and beyond.

The mining giant expects the copper market to remain broadly balanced in the near term, with Chinese demand projected to grow owing to stimulus directed at power infrastructure and strong electric vehicle demand. Over the long term, BHP anticipates substantial copper demand growth.

“We think global copper demand will be over 50-million tonnes a year by 2050, around 70% higher than 2021 levels. And there’s just not enough production planned to supply it,” Henry said in an earnings call.

“We have a great story to tell in copper. We have the world’s largest copper resource. We are productive, consistent, and reliable. And the pathways we have for further growth in Chile and South Australia are compelling,” said Henry, noting that BHP has an aspirational pathway that could produce more than two-million tonnes a year of copper from the assets it operates.

“While changes in market conditions mean it’s never ‘just buy’ or ‘just build’, investing in our organic copper project pipeline is certainly very attractive,” stated Henry.

In the half-year under review, BHP delivered a 10% year-on-year increase in copper production. Underlying operating earnings rose to $5-billion, with copper’s contribution to underlying earnings climbing to 39%.

Henry also highlighted potash as a commodity with a “promising future”. The company’s Jansen project in Canada remains on track for first production by the end of next calendar year.

“It’s strategically significant for BHP. It further diversifies our portfolio, increasing our resilience to market cycles. BHP will be the only major diversified miner with exposure to this commodity,” said Henry.