Melbourne, June 23, 2026, 02:06 (AEST)
- BHP closed Monday at A$60.34, down 1.73%, as the Australian market shut for the day.
- The stock has lost 7.2% in two sessions following Friday’s 5.6% rout.
- Jansen Stage 2 is now expected to cost US$6.9 billion, while BHP still forecasts group capital spending of about US$11 billion in fiscal 2027.
BHP Group Ltd (ASX:BHP) fell 1.73% to A$60.34 on Monday, extending the selloff triggered by its Canadian potash reset. Rio Tinto lost 0.78% and Fortescue 0.76%, while BHP’s New York depositary shares (NYSE:BHP) were down about 2.3% at US$85.85 in late-morning trade.
The relative move matters. The S&P/ASX 200 ended just 0.1% lower at 8,816.1, yet State Street’s index-tracking fund put BHP at 11.61% of its holdings on June 19. A simple weight-times-return calculation suggests BHP alone cut about 0.20 percentage point from the benchmark — more than the market’s net fall. Gains elsewhere hid part of the damage.
There is another signal in the scale of the repricing. Applying the two-day decline to BHP’s Monday market value of A$306.6 billion implies that nearly A$24 billion of equity value disappeared. That is roughly seven times the Australian-dollar value of the US$2.3 billion impairment. The comparison is not one-for-one — an impairment is a non-cash accounting charge, while a share price reflects future cash flows — but the gap suggests investors are pricing further spending and weaker returns, not merely the write-down.
BHP lifted estimated investment in Jansen Stage 2 to US$6.9 billion from US$4.9 billion and expects first production in late fiscal 2031. The stage was 16% complete at the end of May, with engineering 83% finished. BHP still projects an 11% internal rate of return, meaning the estimated annualised project return, and an eight-year payback. Its forecast EBITDA margin — operating profit before interest, tax, depreciation and amortisation — remains above 65%.
William Taylor, chief operating officer and portfolio manager at ETF Shares, called the share move a “direct reaction to climbing development costs” and said investors were focused on “immediate capital intensity.” In plain terms, capital intensity is the cash needed to build the asset. More of it leaves less room for dividends, debt reduction or competing copper projects. Reuters
The harder issue is strategic lock-in. BHP approved Stage 2 in 2023 before Stage 1 had produced a tonne. Barclays analysts cited by Bloomberg calculated a 7.1% combined return across both stages, against BHP’s 11% estimate for Stage 2 alone. The scopes differ, but the contrast helps explain why the market has applied a broader execution discount.
Incoming CEO Brandon Craig, who takes over on July 1, has described the combined operation as a “low cost, long life asset” with a mine life of almost 60 years. The timing puts Jansen near the top of his opening capital-allocation agenda, alongside BHP’s copper expansion plans. Morningstar
But the bearish reading could prove excessive if Stage 1 starts in mid-2027 and Jansen reaches BHP’s projected low-cost position. The downside is another cost or schedule revision, weaker potash prices than BHP assumes, or disruption at Port Hedland, where workers have authorised industrial action affecting the company’s Western Australian iron-ore export chain. BHP has said contingency plans are in place.
The next scheduled test is BHP’s full-year operational review on July 16, followed by annual results on August 18. Until then, the stock is likely to trade less on the US$2.3 billion charge itself than on whether management can hold the US$11 billion spending line without squeezing project returns or shareholder distributions.
