BHP Group, the world’s largest mining company by market cap

The BHP Group (BHP) is an Australian multinational mining and metals public company, and a global leader in the diversified resources sector. Headquartered in Melbourne, Australia, its operates in more than 90 locations worldwide. Its teams work on extracting, processing and transporting commodities to meet the global demands of decarbonisation, electrification, urbanisation, and a rapidly growing population.

A history almost two centuries old

BHP’s 173-year legacy started from two small mining companies established in the mid-1800s and has since transformed into an industry leader the world over.

Broken Hill Proprietary (BHP) and Billiton

BHP’s history began with a silver, lead and zinc mine in Broken Hill, Australia, growing into an international leader in the exploration, development, and marketing of diverse natural resources, including iron ore, copper, oil, gas, and more, while also leading in value-added flat steel products. In 1885 the company was floated with the intent of finding the best mining experts in the world.

NV Billiton Maatschappij is officially established, with the company’s articles of association signed at the Groot Keizerhof Hotel in The Hague, Netherlands. Shortly thereafter, the Billiton Company acquires the mineral rights to both Billiton and Bangka Islands, commencing tin mining operations on Billiton Island, which continued until 1958.

Billiton also evolved into a major global player in the metals and mining sector, producing aluminium, alumina, chrome, manganese and other minerals, and expanding its influence with a significant copper portfolio.

Acquisitions and other key developments

In 1963, BHP and Esso collaborated on the search for oil, and in 1970 the Royal/Dutch Shell Group purchased Billiton. In 1984 BHP acquired Utah International from General Electric. In 1991, BHP went on to discover diamonds in Canada. In 1994, Gencor acquired Billiton, and in 2000 BHP formally becomes BHP Limited.

On 18 March 2001, BHP and Billiton finalised a merger agreement with their shareholders. The Foreign Investment Review Board (FIRB) granted approval in June 2001, with the stipulation that the BHP Billiton Group retain its strong Australian presence, including keeping its headquarters in Melbourne. The European Commission also gave its approval on 15 June 2001.

In July 2002, a major BHP Billiton milestone occurs with the demerger of BHP steel. In 2004, the company entered a joint venture with China and Japan, and in 2005 it acquired Western Mining Corporation. In 2012, BHP Billiton consolidates its operations.

BHP Billiton announced on 19 August 2014 its plan to simplify its portfolio by creating South32, an independent global metals and mining company, comprising a selection of high-quality alumina, aluminium, coal, manganese, nickel, silver, lead, and zinc assets. South32 was officially established in May 2015 following a favourable shareholder vote.

In 2018, BHP Billiton Limited and BHP Billiton plc were renamed BHP Group Limited and BHP Group plc, respectively. However, on 31 January 2022, BHP unified its corporate structure under BHP Group Limited. Under this new unified corporate structure, Group Limited shares would be listed on the Australian (primary listing), London (standard listing) and Johannesburg (secondary listing) stock exchanges, with an American Depository Receipt (ADR) program on the New York Stock Exchange.

BHP today and market capitalisation

Today, BHP continues to concentrate its portfolio on iron ore and higher-quality metallurgical coal, which are preferred by its steelmaking customers, along with copper for electrification and potash to improve the efficiency and sustainability of food production and land use.

As per its listing on the Australian Securities Exchange, BHP has a market capitalisation of 207.5 billion, a net income of 7.39 billion, and revenue of 55.66 billion.

According to a recent Nasdaq article however dated 9 August, “Fintel reports that on August 8, 2024, MACQUARIE RESEARCH downgraded their outlook for BHP Group (ASX:BHP) from Outperform to Neutral.”

2024 bid for Anglo American denied

In 2024, BHP offered to purchase rival Anglo American for approximately $39 billion dollars, which, if successful, would have been the largest industry deal in many years. So significant was this prospective transaction that Anglo American was reported to have said that it was a deal that could reshape global mining.

Several negotiations took place which consequently collapsed and ended with walking away from its $43 billion plan to take over its competitor. Reuters reports that a major reason for this collapse was “the structure of BHP’s deal, which required Anglo to unbundle its South African platinum and iron ore businesses”.

Sustainability – climate change, biodiversity, and land

As far as climate change is concerned, BHP aims to support the Paris Agreement’s goal of limiting global temperature rise to well below 2°C, with efforts to cap it at 1.5°C. The company also seeks to integrate climate-related risk and opportunity assessments into business strategies and planning. Additionally, BHP is committed to collaborating with local communities affected by business changes to ensure a fair transition and create lasting mutual value.

Additionally, according to its website, BHP acknowledges that its mining activities have the potential to directly impact biodiversity, such as through the clearing of native vegetation, while also relying on health ecosystems (e.g. water supply and climate regulation).

As part of its 2030 Healthy Environment goal, BHP is committed to supporting national and global efforts to halt and reverse biodiversity loss by ensuring that at least 30% of the land and water it manages is under conservation, restoration, or regenerative practices by the end of FY203, for nature-positive outcomes.

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