BHP Weighs Iron Ore and Coal Spin-Off Amid Strategic Pivot to Copper and Potash

BHP Group (NYSE: BHP), the world’s largest listed miner, considered spinning off its Australian iron ore and coal operations to sharpen its focus on future-facing commodities like copper and potash, according to sources familiar with the matter. The plan echoed its 2015 South32 (OTC: SOUHY) spin-off and was explored as BHP aimed to green its portfolio and prepared a failed bid for Anglo American (JO: AGLJ) in 2023–2024.

Iron ore currently delivers about 60% of BHP’s profits, while coal represents a significant share of its carbon emissions. Shedding these units would mark a historic shift away from its roots in Australian mining, dating back to 1885. The company reportedly favored an Australian listing for any spin-off, potentially generating strong local investor interest due to the expected cash and franking credits.

Despite internal discussions between CEO Mike Henry and former CFO David Lamont, the plan was shelved. BHP determined that the high cash flow from iron ore and coal is still essential to fund large-scale developments like its Jansen potash project in Canada and the Escondida copper mine in Chile.

While BHP declined to comment, sources noted the company saw potential in a more agile copper-potash unit pursuing strategic tie-ups, possibly with firms like Teck Resources (NYSE: TECK). However, the failure to acquire Anglo American weakened that prospect, and with global enthusiasm for green goals cooling, urgency has eased.

New BHP Chair Ross McEwan, formerly of NAB (OTC: NABZY), is now overseeing leadership changes as the miner recalibrates its growth strategy. A CEO succession process is also underway as BHP evaluates long-term moves in response to evolving market dynamics and resource demands.