Hello everyone. I'm Belinda Ford from BHP communications. I'm joined today by our CEO, Mike Henry. Our CFO, Vandita Pant. And today we're going to talk a little bit about our half year financial results. And it's a chance for you, our shareholders, to hear directly from Mike and from Vandita not just about the last six months, but what our growth outlook is looking like for BHP in the years to come. With that, Mike, I'll start with you. We've seen a series of records in copper and iron ore. Earnings and margins are up. And there's a lift in the interim dividend. So it looks like a strong performance on the numbers. But what's the big story in the results for you?
The big story in our results. Well first, I would just, as you said, this was a very strong half of operational and financial performance and importantly, achieved safely. That strong performance allows for healthy returns to shareholders as well as investment in growth. Our copper, for example, this half, partly because of a tightening copper market, but also because all of our effort to grow our copper business, not only did the business perform well, it generated more than 50% of BHP's earnings this past half for the very first time. We have a number of exciting copper growth options ahead of us to build upon that strong performance, and that's going to sit very well alongside our entry into a new business for us being potash. During the course of the half, we saw production records at WAIO. It's the lowest cost of any major iron ore producer globally and has been for a number of years now. And maybe if I come back to your question about what's the big story, the big story is that the combination of stability and growth in, particularly in future facing commodities and of copper and potash, that's a pretty compelling story. And it positions us to deliver value for shareholders, not only now, but well into the future.
Mike, strong results. But is this as good as it gets for copper at BHP?
No, as good as it is, it's set to get even better. We delivered 30% growth in our copper business over the past four years. And in doing so, we've established BHP as the world's largest copper producer. And that's been deliberate. We said that we want to grow in copper, we find the commodity very attractive. And it's important that we align the BHP portfolio with long term demand fundamentals. So we've grown by that amount already. In addition to that though we've got exceptional growth projects, or four big growth projects across the world. Overall, we're targeting 2.5 million tonnes per annum of production, including by-products by the mid 2030s.
How are we going to achieve that?
New concentrator at Escondida. And we're on track to submit the application for a permit within the next six months. In Copper South Australia, we have growth plans to 650,000 tonnes of copper cathode per year or close to 1 million tonnes in copper equivalent. So including by-products by the late 2030s. In Argentina, we've got this exciting new project in the Vicuna joint venture that's advancing rapidly. The joint venture applied for what's known as RIGI, which is enabling or investment enabling bit of legislation in Argentina. They submitted their application for that recently. And when developed, Vicuna has the potential to be a top five copper, gold and silver producing asset globally. And then finally, we have a 45% interest in Resolution Copper in the US, in Arizona. This is one of the largest undeveloped copper projects in the world. And in fact, it could supply 25% of the US's copper demand for many decades. We are expecting or forecasting a copper supply shortfall over the coming decades, and so more projects are needed, there's more capital that needs to be invested and that's going to support price. And BHP is just so well positioned for this now, you know, we're starting now as the world's largest copper producer, four big growth projects as I said, of course, we're focused on executing those with discipline. But through doing so, we know we're going to create great value for shareholders in the coming years.
Vandita, I want to turn now to the dividend where BHP is paying above its minimum payout ratio of 50%. At the same time, net debt is higher for the half. How do these two marry up? And should our shareholders expect higher net debt levels to constrain dividend payouts going forward?
I would say, Belinda, that we're very confident that we can balance dividends, attractive growth and a strong balance sheet, as you would have seen that our interim dividend for the first half was 73 US cents per share. Which reflects a strong half performance as well as our outlook, which is confident and growth ahead. We are also starting to do new and exciting things to unlock more capital. Just a couple of months back, we did $2 billion of a capital unlock from WAIO power agreements that we signed, which gives us flexibility to invest in growth as well as return value to shareholders. From a net debt perspective, we are well within our target range and very comfortable with our gearing as well. On Capex, Mike was just talking about our growth projects and this year we are expecting to invest $11 billion in support of growth as well as on sustaining capital. And this comes as cash flows remain really strong. As our shareholders know, we have a policy of minimum 50% of underlying attributable profit to be distributed back to the shareholders. And then every six months, our capital allocation framework allows for all this cash being generated and being unlocked to be looked at and every six months, dividends being sized, which could be higher than this. We do know our investors like dividends and how important dividends are, including to the hundreds and thousands of our retail shareholders.
I hope so too Vandita. We've talked about copper, Mike, but I'm keen to talk about potash. It's obviously going to be an important commodity for BHP going forward, and Vandita, I'm keen to hear how that project is going.
We have completed the detailed review of both the cost and schedule for JS1, which is Jansen one phase, and we remain on track to deliver first production from JS1 by mid calendar year 2027, less than 18 months away now. Updated cost estimates for JS1 are $8.4 billion. And this experience is something that we are taking on and making sure the learnings get applied to all our projects and in terms of delivery.
Thanks, Vandita. Mike, anything to add?
