Analysis

BHP said on 18 August that it produced about 2 million tonnes of copper for a second year and copper supplied more than half its roughly USD 33 billion underlying EBITDA. Its 2026 annual report reports USD 18 billion copper EBITDA, USD 4.5 billion by-product revenue and average unit costs 6% lower across major assets despite higher diesel prices. These are company-wide measures, not an energy reading for a copper mill.

BHP’s August outlook discusses grade decline and depletion as supply constraints, while a proposed Escondida concentrator is a growth option. The physical question is how copper grade and recovery affect metal tonnes per ore tonne while electricity and diesel remain tied largely to material moved and crushed. Prices and by-product credits can mask that mechanical pressure in a reported net cost.

Evidence

The August release gives production and EBITDA context; the annual report gives by-product and cost figures. Different bases—consolidated, attributable and copper-equivalent—must stay separate.

The USD 4.5 billion by-product revenue spans BHP copper operations. Higher gold or uranium receipts can lower net copper cost even if gross power use per ore tonne does not fall.

Mechanism

Recovered copper is ore tonnes × copper grade × recovery fraction. At constant throughput, lower grade reduces metal output; energy per metal tonne rises even if kWh per ore tonne stays fixed.

Grinding hardness, lift depth, water pumping and haul distance can raise energy per ore tonne. Better recovery or throughput can offset grade decline, but needs plant-specific tests and capital.

Sensitivity

Pure illustration: 20 million tonnes ore × 1.0% copper × 85% recovery = 170,000 tonnes copper. At 0.8% grade and the same recovery, output is 136,000 tonnes, 20% less. These are not BHP grades.

Assume 20 kWh per ore tonne and USD 0.10/kWh: 400 GWh and USD 40 million power cost. That is USD 235 per recovered copper tonne at 1.0% grade and USD 294 at 0.8%, a USD 59/t rise before other costs. All energy and tariff inputs are hypothetical. Extending the same hypothetical to 0.6% grade gives 102,000 recovered tonnes and USD 392/t electricity cost.

Economics

A higher copper price can lift EBITDA despite grade-related cost pressure. By-product credits can reduce reported net unit cost while power invoices remain unchanged. Portfolio EBITDA therefore cannot substitute for mine-grade and meter data.

Comminution, sorting or recovery investment needs evaluation on net cash after electricity, reagents, maintenance, water and capital. A one percentage-point recovery gain yields different tonnes at different feed grades.

What to test

In 2026–2027, compare ore milled, feed grade, recovery, kWh and diesel per ore tonne, metal output and by-product credits for the same mine and period. Check whether new concentrator plans reach investment and commissioning milestones.

If grade falls with no recovery or throughput gain, cost per recovered tonne rises in the fixed-input example. Efficiency or by-products may still reduce reported net cost. This is a sensitivity, not a mine forecast.