Global mining group BHP said Tuesday it expects China and India to boost demand for its commodities in the year ahead after profits took a hit from lower iron ore and copper prices
The Australian multinational, a leading producer of metallurgical coal, iron ore, nickel, copper and potash, said net profit slumped 32 percent year-on-year to US$6.46 billion in the six months to December 31.
Sales slid 16 percent to $25.7 billion in the same period, it said, citing a drop in prices for iron ore and copper, rising inflation, and a decision by the state of Queensland to raise royalties on coal to “the highest maximum rate in the world”.
“In the near term, BHP’s operating environment is expected to remain volatile,” the Melbourne-based group said in a statement, as economies cooled under the influence of anti-inflationary measures.
China, however, was expected to be a “source of stability” for commodity demand.
Chief executive Mike Henry said he was “positive” about the demand outlook in the year ahead.
“We expect demand in China and India to provide stabilising counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan and Europe,” he said.
“The long-term outlook for our commodities remains strong given population growth, rising living standards and the metals intensity of the energy transition, including for steel-making raw materials.”
Despite a global drive to cut climate-changing carbon emissions, BHP said it expected higher-quality metallurgical coal to be used in steel-making blast furnaces “for decades”, saying they would help to reduce the carbon intensity of furnaces when compared to lower-quality coals.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed - AFP)