The BHP Group Ltd (ASX: BHP) share price dropped around 5% in the final two trading days of last week and it's down around 10% from the end of January 2023 to now. So is the S&P/ASX 200 Index (ASX: XJO) mining share a good buying opportunity at its current price?
As the ASX's biggest company, what happens with the business can have an outsized impact on the ASX and perhaps even Australia.
As with a number of the ASX's blue chips, the main insights we get into the company's performance are through its half-year results, full-year results, and perhaps annual general meetings (AGM).
But with BHP, and other ASX 200 mining shares, investors also get operational mining updates every three months.
We heard last week about BHP's operational performance for the three months to 31 March 2023.
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The numbers
In that quarterly update, copper production grew 10% year over year to 405.9 kt. Iron ore production was flat at 59.8 mt. Metallurgical coal production was down 13% to 6.9 mt. Energy coal production increased 53% to 3.9 mt. At the same time, nickel production went up 5% to 19.6 kt.
While the business achieved strong numbers for iron, copper, and nickel, the quarter also included the death of a BHP worker who died in a rail incident in February.
Progress with the acquisition
BHP noted that shareholders of copper miner OZ Minerals Limited (ASX: OZL) recently voted "overwhelmingly" in favour of BHP's takeover offer.
The management of BHP is now focused on integrating the OZ Minerals business as it builds an "internationally competitive copper business in South Australia and incorporating West Musgrave into its nickel options in Western Australia".
Searching for more growth
The comments made by BHP CEO Mike Henry were promising regarding BHP's expansion investment efforts and the outlook for resources from both China and India:
We are pursuing growth options in copper and nickel globally – we aim to have up to 10 drill rigs on the ground at Oak Dam in South Australia in the next few months and have seen promising results from a potential new copper prospect in Arizona. In Canada, we signed $260 million (CAD) in new contracts with Indigenous suppliers in March, and construction of the Jansen potash project is on track.
Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China's economic rebound and solid momentum in India's steelmaking growth helping to offset the impact of slowing growth in the US, Japan, and Europe.
Is the BHP share price a buy?
BHP has proven itself as one of the best in the world at what it does. The ASX 200 mining share has made huge profits over the last few years and paid big dividends.
It's tricky to say what the iron ore price will do next. Chinese entities obviously want to pay a lower price, but it could rise in the short term if the Chinese economy recovers strongly from COVID-19 impacts.
As such a large business, it's harder for a new project or acquisition to 'move the needle' for BHP. It's hard for the business to deliver outperformance when it's so big.
I do like the growing exposure to nickel and copper, while potash could be a useful addition once the Canadian Jansen project is operational.
The BHP share price has dropped 5% since my bearish view on the company. It's a bit better now, but I'd prefer it to be cheaper before saying it's a good price to buy in at — perhaps under $40. But, due to its size, I think there are other ASX mining companies that could be better opportunities.
