A couple of years ago everyone was talking about a 'rotation out of mining into banks'. Could this be the start of the reverse?

CBA et al. are all correlated to the Aussie housing market, and BHP is now correlated to Copper and more internationally related industries.

I've always been skeptical of this argument, but could make a couple of percentage points?

I have about 8% of my portfolio in BHP, but I’ve always been slow to sell, so am going to continue sitting on my hands. I think copper and potash will be big contributors for many years to come and I think it’s one of our best run companies. Sure I could pivot into something else with a higher dividend yield but would I end up with the same quality? I sold FMG a few years ago expecting the Iron Ore price to collapse and that hasn’t happened yet.

I picked up BHP in 3 tranches after the Brazil mining disaster so have a cost base of ~$18 a share, happy for it to keep on, keeping on.

cheers

JM

Nice one @JohnnyM , current dividend returns are almost 11%, before franking credits, on the money invested at an $18 cost base. Pretty tidy on top of almost 350% capital growth.

@Jarrahman an You could add another ASX20 stalwart CSL into that index rotation

19th June 2026: BHP does look like it could fall on any bad news or sentiment change @Rick however I reckon the reaction to today's cost blow-out revelations in their Jansen Potash Project Update show that there are still people out there buying the dips with BHP.

MarcusToday said in their miday update today: BHP (-3.9%) is the headline story after flagging cost blowouts on its Canadian potash project rising to $6.7bn - Barclays noted the 42% overrun raises questions over execution of the broader growth pipeline.

Their SP has fallen further since then:

However that still looks Ok because they remain within the rising channel:

Of course, that could change when all of the broker and analyst updates and client notes are received and acted on, but for today, a day in which materials are being belted across the board, particularly mining companies, BHP have held up reasonably well considering the magnitude of that cost blowout: $2 Billion above initial estimates is not an insignificant number. [total investment estimate for Jansen Stage 2 increased today from US$4.9 billion to US$6.9 billion (including contingencies) with first production estimated in late FY2031.]

It's a crack, but BHP isn't broken. Being sold down around -5% on a $2 Bill cost blow-out shows just how much support the company has globally - like I said, there's people buying the dips... so far.

Disc: Not held.

P.S. Additional: Also from the MT newsletter today: BHP has flagged a $2.3bn impairment charge on the Jansen Stage 2 potash project in Canada, with total Stage 2 investment now $6.9bn against the $4.9bn approved in 2023 - the third time BHP has blown past cost and schedule estimates on this project. First production from Stage 2 now pushed to late FY2031. Jefferies reiterated hold and said the update was "unhelpful" given the poor potash price outlook. Stage 1 remains on track for mid-2027 at a cost of $8.4bn, 50% above the 2021 approval.

So this potash project has a history of cost blowouts - not helpful (as Jefferies notes) but not a company killer either. I don't hold them because I want to hold pure plays rather than diversified miners, but I would probably add them to my ISA if they looked cheap. They do NOT look cheap, but they clearly have global support; I do however agree with you @Rick that there are significant risks to the downside with BHP at these elevated levels.

P.P.S. They closed at $61.40 today, so -5.6% down at the end of the trading day. Not really smashed, but down.