Is BHP (ASX:BHP) Using Battery-Electric Trucks to Quietly Reshape Its Long-Term Cost Base?

• BHP Group announced that Australia’s first Cat 793 XE Early Learner battery-electric haul trucks have arrived at its Jimblebar iron ore mine in the Pilbara, beginning on-site testing with Rio Tinto and Caterpillar of zero-exhaust mining haulage technology.
• This industry-first collaboration not only advances BHP’s long-term decarbonisation plans, but also serves as a real-world test of whether large-scale battery-electric fleets can maintain productivity in one of the world’s most important iron ore hubs.
• We’ll now explore how this early-stage battery-electric haul truck trial could influence BHP’s long-term cost profile, project risks and ESG positioning.

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BHP Group Investment Narrative Recap

To own BHP, you need to believe its low cost, scale iron ore and growing exposure to copper and potash can offset commodity volatility and project execution risk. The Pilbara battery-electric haul truck trial looks directionally positive for long term decarbonisation and operating costs, but it is unlikely to shift the main near term share price drivers, which remain iron ore pricing and progress on major projects like Jansen.

The renewed takeover approach to Anglo American sits in the background as a separate but important storyline, because any large transaction could reshape BHP’s exposure to copper and its overall risk profile. Set against that, the Jimblebar truck trial is a more incremental development that feeds into BHP’s broader ESG and cost ambitions, rather than a catalyst that rivals the potential portfolio impact of large scale M&A.

However, investors should also be aware that rising ESG expectations and the risk that decarbonisation technologies fail to deliver cost effective results could...

Read the full narrative on BHP Group (it's free!)

BHP Group’s narrative projects $49.6 billion revenue and $10.0 billion earnings by 2028. This implies revenue declining by 1.1% per year and an earnings increase of about $1.0 billion from $9.0 billion today.

Uncover how BHP Group's forecasts yield a A$45.21 fair value, in line with its current price.

Exploring Other Perspectives

Twenty one members of the Simply Wall St Community currently value BHP between A$29.94 and A$55.50, highlighting very different expectations for the company. When you layer this against BHP’s reliance on large, long lived Western Australian iron ore operations, it underlines why examining several independent views on future risk and reward can be so important.

Explore 21 other fair value estimates on BHP Group - why the stock might be worth as much as 24% more than the current price!

Build Your Own BHP Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your BHP Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free BHP Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BHP Group's overall financial health at a glance.

No Opportunity In BHP Group?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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