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BHP reported a near 30 per cent increase in first-half net profit as the world’s largest mining company by market capitalisation benefited from booming demand for copper.
BHP said revenue in the six months to December 31 rose 11 per cent year on year to $27.9bn, as profit attributable to shareholders increased 28 per cent to $5.6bn. The results exceeded analysts’ expectations.
Mike Henry, chief executive of the Australian company, said the performance represented a “milestone for BHP” as copper contributed the largest share of its profit for the first time, accounting for 51 per cent of underlying earnings before interest, taxation, depreciation and amortisation.
BHP will pay a 73 cents per share interim dividend, which represents 60 per cent of earnings.
Copper is at the forefront of the global mining industry’s growth as demand for the red metal from the energy and automotive sectors pushes prices higher.
Boosting exposure to copper was at the centre of BHP’s unsuccessful attempts to combine with Anglo American, most recently late last year.
BHP has instead relied on smaller deals to maintain its position as the world’s largest copper producer, including the takeover of Australian company OZ Minerals, and the Chilean project Vicuña.
Canada’s Lundin Mining, which owns Vicuña with BHP, said this week that the Chilean project was progressing rapidly, with $7.1bn to be spent in an initial development phase.
BHP has also benefited from the booming price for other metals and minerals that it produces as a byproduct of copper mining, including gold, silver and uranium. About $2bn of revenue was generated from non-core products in the first half.
Henry said various projects “put meat on the bones” of BHP’s planned copper growth, with the company aiming to produce 2.5mn tonnes annually by the mid 2030s.
BHP has meanwhile signed a $4.3bn deal with Canada’s Wheaton Precious Metals to supply silver from its Antamina mine in Peru, as the Australian company seeks to benefit from the sharp rise in the metal’s price.
BHP’s iron ore production has been in the spotlight as a result of tough negotiations with China Mineral Resources Group, a Beijing-backed central buying group, with certain grades of the Australian company’s domestic production blocked.
But BHP said iron ore production rose 2 per cent in the first half, adding it expected Chinese demand for what is a key ingredient in steel making to remain resilient.