Should I buy BHP shares after its update?

BHP Group Ltd (ASX: BHP) shares have come under pressure on Tuesday following the release of the mining giant’s latest quarterly update.

The shares are down around 2% to $59.19 as investors digest the company’s operational performance and outlook.

There were some mixed results, but I think the announcement provides several reasons to remain positive about BHP’s future.

Here’s what stood out to me.

A strong performance from iron ore

One thing I liked about the update was the performance of BHP’s Western Australian iron ore operations. Production increased 4% compared with the same quarter last year, despite considerable planned maintenance.

The company also achieved first-quarter production records at both its mines and ports, demonstrating the strength of its integrated operations.

I think that is encouraging because iron ore remains an important source of cash flow for BHP. Keeping these operations running efficiently helps provide the financial resources needed to invest in other parts of the business.

Management also maintained its production guidance for FY27, giving me confidence that operations are progressing broadly as expected.

Copper remains the big opportunity

The copper result was less impressive, with production falling 19% during the quarter. Lower ore grades, scheduled maintenance, severe weather, and operational disruptions all contributed to the decline.

Nevertheless, BHP maintained its full-year copper production guidance. And there was some encouraging news on pricing, with average realised copper prices increasing 53% compared with the same period last year. That could provide a meaningful earnings benefit if prices remain elevated.

Looking further ahead, I continue to believe copper will become an increasingly important part of BHP’s investment case.

Demand from electricity networks, renewable energy, and AI infrastructure should create opportunities for producers capable of supplying large quantities of the metal.

BHP is preparing for that demand. The company announced further progress on its copper expansion plans, including additional funding for the proposed new concentrator at Escondida in Chile.

It also reported an increase in the mineral resource base at Olympic Dam, supporting its longer-term ambitions in South Australia.

I think these developments could help BHP become a substantially larger copper producer over the coming decade.

Another growth opportunity approaching

I was also pleased to see continued progress at BHP’s Jansen potash project in Canada.

Stage 1 is now 87% complete, with first production still expected in mid-2027. I think this could become an important addition to BHP’s portfolio.

Potash provides exposure to agriculture and global food production, giving the company another source of demand beyond its established metals businesses.

There is still considerable investment required, but Jansen is getting closer to becoming an operating business.

Foolish takeaway

I would be happy buying BHP shares following today’s update.

The weaker copper production deserves attention, but I like that management has maintained guidance while continuing to advance its major growth projects.

For me, the combination of strong iron ore operations, growing copper ambitions, and the approaching start of potash production makes BHP a mining share worth owning for the long term.

The post Should I buy BHP shares after its update? 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.