BHP vs. VALE: Which Global Mining Powerhouse is the Better Buy Now?

BHP Group Limited BHP and Vale S.A. VALE are among the world’s largest iron ore producers and diversified miners, making them competitors in the global metals and mining sector. Both companies are positioned to benefit as infrastructure investment picks up worldwide and long-term demand grows for steel, copper, lithium, nickel and other minerals essential for clean energy technologies.

BHP has a market capitalization of $165 billion, while VALE has a market capitalization of $66 billion. 

For investors interested in this space, let's analyze which stock is better positioned for upside, BHP or Vale. A closer look at their fundamentals, growth drivers and key risks can offer clarity.

The Case for BHP

BHP produced a record 263 Mt of iron ore in fiscal 2025, within its guided 255-265.5 Mt and up 1% year over year. Production at Western Australia Iron Ore (WAIO) was a record of 257 Mt (290 Mt on a 100% basis). WAIO has been the lowest-cost iron ore producer globally for more than four years. 

The upside continued in the first half of fiscal 2026 with iron ore production increasing 2% year over year to 134 Mt. WAIO reported a record first half production of 130 Mt, aided by strong supply-chain performance. 

For fiscal 2026, BHP continues to expect iron ore production of 258-269 Mt. WAIO’s output is likely to be 251-262 Mt (284-296 Mt on a 100% basis). This factors in the planned renewal of Car Dumper 3 (CD3) and the ongoing tie-in activities for Rail Technology Program 1 (RTP1). 

BHP continues to reshape its portfolio toward commodities such as copper and potash, allocating nearly 70% of its medium-term capital expenditure to these areas. This strategy positions the company to benefit from decarbonization, electrification, population growth and rising living standards in emerging markets.

Copper production reached a record 2,017 kt in fiscal 2025, the first time BHP crossed the 2,000-kt milestone. Output has risen 28% over the past three years, reflecting sustained investment. 

In the first half of fiscal 2026, copper production remained constant year over year at 984 kt. BHP increased its fiscal 2026 copper output guidance to between 1,900 and 2,000 kt from prior stated 1,800-2,000 kt. 

BHP is also advancing the Jansen Stage 1 potash project, a large-scale, low-cost, high-grade resource with a mine life exceeding 100 years. It has been 75% completed and BHP is working toward its first production by mid-2027. Once operational, Jansen Stage 1 is expected to produce 4.15 million tons of potash annually. Stage 2 of the project has been 14% completed and is expected to deliver its first production in fiscal 2031. 

These investments will transform Jansen into one of the world’s largest potash mines, doubling production capacity to 8.5 million tons per year, positioning BHP as a major global producer of potash by the end of the decade.

The Case for Vale

Vale recently stated that iron ore production for 2025 was around 335 Mt, at the higher end of its targeted 325-335 Mt. Copper output was around 370 kt in 2025, also meeting the high end of its targeted 340-370 kt. Nickel output was reported at 175 kt compared with the company’s target of 160-175 kt.

Vale is also investing heavily in the base metals business to benefit from the global energy transition. The company’s capex plans for the business are $1.6 billion in 2026 and $2 billion from 2027 onward. 

In 2026, Vale's copper production is expected to be between 350 kt and 380 kt, and reach 420-500 kt as of 2030 and 700 kt by 2035. With these projections, Vale promises a 7% CAGR over 2024-2035 versus the 4% average for peers.

The Bacaba project will extend the life of the Sossego Mining Complex, contributing an average annual copper output of 50 ktpy over an eight-year mine life. Production is expected to start in the first half of 2028. Other projects, such as Salobo Coarse Particle Flotation (CPF), Alemão and Cristalino, will increase Vale’s copper production capacity. 

Vale recently signed an agreement with Glencore Canada (Glencore) to jointly evaluate a potential brownfield copper development project at their adjacent properties in the Sudbury Basin, with an expected start-up in 2030. Vale plans to hit 700 kt levels by 2035, primarily through the accelerated development of assets in the North and South hubs in the Carajás region.

For 2026, Vale expects its nickel production between 175 kt and 200 kt, reflecting replenishment projects in Canada, exposure to Pomalaa and Morowali, and the start-up of the second furnace at Onça Puma. For 2030, nickel production is anticipated at 210-250 kt, with input from projects such as Thompson Ultramafics, Sorowako HPAL, partnership projects and offtake.

How do Estimates Compare for BHP & VALE?

The Zacks Consensus Estimate for BHP’s fiscal 2026 earnings indicates a year-over-year rise of 23.1%. The estimate for earnings for fiscal 2027 reflects a 1.9% drop.  Both the earnings estimates for fiscal 2026 and fiscal 2027 for BHP have moved up over the past 60 days. 

The Zacks Consensus Estimate for Vale’s 2025 earnings of $2.07 per share indicates year-over-year growth of 13.7%. The Zacks Consensus Estimate for Vale’s 2026 earnings is $2.08 per share, which projects a 0.4% rise. Both the EPS estimates for Vale for fiscal 2025 and fiscal 2026 have been revised upward in the past 60 days.

BHP Group & Vale: Price Performance & Valuation

In a year, BHP stock has appreciated 36.7%, lagging Vale, which has gained 92.2%. 

BHP is trading at a forward price-to-sales multiple of 3.17X, while VALE’s forward sales multiple sits at 1.63X.

BHP or VALE: Which is a Better Pick?

BHP and Vale are both well-positioned for durable long-term growth, backed by resilient iron ore operations. A supportive commodity price backdrop and rising earnings estimates further support the stocks. However, an attractive valuation and a stronger one-year price performance strengthen the investment case for Vale. 

Investors seeking exposure to the iron mining space might consider VALE to be the more favorable option at this time. 

Both VALE and BHP currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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