BHP Group Ltd (ASX: BHP) shares are up 0.48% during the lunch hour on Tuesday.
Shares in the S&P/ASX 200 Index (ASX: XJO) iron ore giant closed yesterday trading for $43.36 apiece. At the time of writing, BHP shares are swapping hands for $43.57 a share.
This comes amid an overnight bump in the iron ore price, up 2.7% to US$103.25 per tonne.
That's today's price action for you.
Now, here's how BHP shares may enjoy some real expansion.
1.43 billion people…and growing
Iron ore remains the biggest cash earner for the big miner.
But coal still delivers a lot of revenue for BHP shares.
In 2022, coal was the third largest revenue earner for the company, just edged out by copper.
Having divested most of its thermal coal mines, BHP is primarily focused on metallurgical coal, also known as met coal or coking coal.
That's the kind of coal used to make steel, as opposed to thermal coal which is mostly used to generate electricity.
BHP's high-quality coking coal provides a high energy output per unit. That makes it desirable in today's steel manufacturing plants as the world works to reduce carbon emissions.
Which brings us to BHP shares and the growth outlook offered by 1.43 billion people.
That's the population of India, by the way. Which has now overtaken China as the world's most populous nation.
BHP's chief commercial officer Vandita Pant is quite bullish on the big miner's growth prospects in India.
As The Australian Financial Review reports, steel production in India increased 25% from 2021 to 2022, with 125 million tonnes produced last year.
And BHP is forecasting the nation will produce 260 million tonnes a year by 2030, or more than double 2022 levels.
That, according to Pant, could offer some real expansion potential for BHP shares.
"We think [260 million tonnes] is actually possible because the players are very credible," she said. "They have a lot of real expansion brownfield projects which can come online and demand is not a problem."
The ASX 200 miner already sends 40% of its coking coal to India. And with steel production ramping up as the nation looks to meet its emissions goals, BHP could see even more demand for its high-quality met coal.
According to Pant (quoted by the AFR):
That speaks to the journey that India needs to go on for decarbonisation. More and more of India's met coal requirements will be higher quality because as higher-quality coking coal is used, the carbon emission footprint is lower.
How have BHP shares been tracking?
BHP shares are down 3% over the past 12 months.
Longer-term, the ASX 200 miner is up 32% over five years.
