Why I think BHP is the best ASX mining share

Choosing one mining share to own through an entire commodity cycle is never easy.

Prices move, projects disappoint, and yesterday’s market favourite can quickly lose its shine.

Even with those uncertainties, one ASX miner stands above the rest for me. That is BHP Group Ltd (ASX: BHP).

A strong foundation in iron ore

BHP still earns substantial cash from its Western Australian iron ore operations.

Iron ore may lack the excitement attached to newer commodities, yet it provides BHP with a huge production base, established infrastructure, and assets capable of generating strong margins when market conditions are favourable.

That cash flow supports dividends, funds new projects, and gives management more flexibility during weaker commodity markets.

Scale alone does not guarantee good returns, especially when mining companies become too enthusiastic with capital. However, BHP can invest through cycles that may force smaller competitors to slow down or abandon projects.

I think that financial strength provides a solid foundation for everything else the company is building.

Copper is changing the business

The most exciting part of BHP’s portfolio in my opinion is copper.

During the first half of FY26, copper contributed 51% of underlying earnings before interest, tax, depreciation, and amortisation, making it the group’s largest earnings contributor.

That is a significant change for a company traditionally associated with iron ore.

Copper demand could keep rising as electricity networks expand and investment flows into renewable energy, data centres, transport, manufacturing, and urban infrastructure. Bringing new supply online can also take many years, which may support attractive economics for established producers with large, low-cost assets.

BHP already owns interests in major operations such as Escondida, Spence, and its South Australian copper assets. It is also working on expansion pathways and future options that could increase production through the 2030s.

I prefer that position to betting on a junior miner that still needs to finance, permit, construct, and successfully ramp up its first major project.

BHP gives investors copper growth from a much stronger starting point.

Potash adds another direction

The Jansen project in Canada will move BHP into potash, a fertiliser ingredient linked to crop yields and global food production.

First production from Stage 1 is expected in mid-2027.

Jansen could eventually become a large, long-life operation, giving BHP an earnings stream driven by different forces from iron ore and copper.

The project has also reminded investors that large mining developments rarely follow a perfect plan. Costs have increased, while Stage 2 has been delayed and become more expensive.

Management will need to show that the finished operation can justify the amount of shareholder capital being committed.

Even with those concerns, I like the strategic logic. A successful potash business would broaden BHP’s portfolio and give it another area where scale could become a lasting advantage.

Why BHP shares are my pick

Every mining investment comes with commodity, operational, political, and project risks.

For me, BHP offers the best balance. It has iron ore assets generating cash today, copper operations becoming increasingly central to earnings, and a potash business that could support growth for decades.

The company also has the balance sheet, technical expertise, infrastructure, and global relationships needed to develop large projects that would be beyond the reach of many competitors.

Foolish takeaway

I would choose BHP shares because its future is becoming broader at the same time as its existing assets continue supporting the business.

Iron ore gives the company financial strength, copper provides an attractive growth runway, and potash could open another substantial source of earnings.

There will be disappointing projects and weaker commodity markets along the way. That comes with owning any miner.

Across a full cycle, I think BHP has the strongest collection of assets and growth options available to ASX investors. That is why it remains my preferred ASX mining share.

The post Why I think BHP is the best ASX mining share appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.