The BHP Group Ltd (ASX: BHP) share price has been an excellent performer for shareholders, rising by around 50% in the last 12 months.
The ASX mining share has seen its fair share of ups and downs, as the above chart shows.
When it comes to a commodity/cyclical business like BHP, I think it's important to remain wary of overpaying. The higher the valuation goes, the smaller margin of safety that gives an investor.
I'm not suggesting BHP shares are a clear, deep-value buy. But, there are a few positives that could help the BHP share price outperform the S&P/ASX 200 Index (ASX: XJO). Let's get into those that could help it beat the market in the longer-term.
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Copper growth
Copper is a very important commodity globally, with it used across various applications like electricity grids, renewable energy generation, computers, lights, TVs, smartphones, electric vehicles, pipes, brass and plenty more.
BHP has been purposefully building its copper exposure through acquisitions, giving it both a good operational base now and future projects that could mean the business is able to grow its production in the coming years.
I believe the copper price could rise in the coming years because of steadily rising demand as well as the supposed increasing difficulty in finding new, high-quality, easy-to-mine copper deposits.
BHP's quarterly update for the three months to 31 March 2016 revealed a big 31% jump in the copper price to US$5.47 per pound. If the copper price continues rising, its copper earnings are likely to rise at an impressive rate.
In the FY26 half-year result, BHP's copper underlying operating profit (EBITDA) jumped 59% to US$8 billion after a 32% rise in the average realised price to US$5.28 per pound.
Resilient iron ore price
BHP is best known as an iron ore miner and this division has historically made a significant portion of BHP's earnings, funding the large dividends.
A strong iron ore price can still have a major impact on the ASX mining share's earnings.
The market had expected the iron ore price to drift towards the low US$90s per tonne in 2026, with increasing iron ore supply (including out of Africa) expected to have an impact.
But, despite that negativity, the iron ore price has actually been very resilient and has risen over the last several months to US$110 per tonne.
At that level, I think BHP's iron ore earnings can continue to be pleasing, perhaps stronger than the market is expecting, which could allow the BHP dividend to be particularly rewarding.
Potash diversification
Many ASX mining shares give exposure to commodities like iron ore, copper, lithium and gold.
BHP is working on a potash project in Canada called Jansen. At the end of the FY26 first half- period, Jansen stage one was 75% complete with a production target date of mid-2027, while Jansen stage 2 was 14% complete with a production target date of FY31.
I think the Jansen potash project could help diversify and grow BHP's earnings.
Overall, I wouldn't describe BHP shares as the best opportunity on the ASX. But, there are a few reasons why it could still be a compelling holding.
