Australia’s largest miner, BHP, has posted a sharp increase in half-year profit on the back of booming prices for the steel-making ingredient iron ore and strong exports from Western Australia.
Shareholders will receive a higher-than-expected $US1.01 per share dividend after BHP revealed underlying profit had increased 16 per cent to $US6.3 billion over the six months to December 31.
It comes as the price of iron ore, Australia’s most lucrative export, has doubled in the past year, boosting the fortunes of top miners including BHP, Rio Tinto and Fortescue. Massive economic stimulus programs post-COVID-19 have been fuelling robust steel demand in China at the same time as disruptions are affecting rival iron ore suppliers in Brazil.
Iron ore cargoes this week were trading around $US160 per tonne.
BHP chief executive Mike Henry on Tuesday praised BHP staff and stakeholders for their “resilience and unwavering resolve”, which, crucially, had enabled the company to continue mining in the face of the coronavirus pandemic.
“I am grateful to BHP employees and contractors for their resilience and unwavering resolve in the face of the pandemic, and for the continued support of the communities, suppliers, customers, governments and traditional owners,” he said. Their efforts have made this strong set of results possible.”
Most analysts had expected BHP to post a slightly higher profit of $US6.3 billion for six months to December. BHP’s statutory profit of $US3.9 billion was 20 per cent lower than the same period last year after BHP flagged $US2.2 billion in write-downs.
These included slashing the value of its thermal coal mines in New South Wales and Colombia amid a worsening outlook for coal and the company’s continued efforts to offload those assets.
The price of BHP’s thermal coal – the coal used in power generation – has collapsed 25 per cent to $US44 a tonne, amid the lingering shock of COVID-19 lockdowns curtailing energy use, and the escalation of China’s bans on Australian coal imports weighing on the market.
As the world’s most carbon-intensive energy source, thermal coal is also the focus of growing concerns from investors and governments over its contribution to global warming.
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Source: Thanks smh.com