BHP posts mining industry's biggest-ever profits
Published by MAC on 2011-08-30Source: ABC News, Energy Business Review
But the "Big Australian" is dogged by criticism
It's currently one of the most successful companies anywhere, with a market capitalisation that puts it among the world's top five corporations.
But, as BHP Billiton looks forward to presenting shareholders with its annual results in October, many questions remain unanswered.
Will it proceed with a massive expansion of its Olympic dam uranium-copper mine, or a major coal project in rainforested Kalimantan?
How will it account for the impacts of a US$1.3 billion expansion of Colombia's Cerrejon coal mine - where it's partnered with Anglo American and Xstrata?
Why has the company recently invested to heavily in shale gas extraction, using so-called "fracking" - a process which heavily-criticised for its potential chemical pollution?
Greeting news of BHP Billiton's super-profits in The Australian for 25 August, Matthew Stevens commented:
"The unavoidable quantum of the increase in BHP Billiton's revenue and profit numbers will doubtless provide verdant pasture for the gathering community of critics of both the Global Australian and the increasingly wealthy industry it leads".
Stevens warned that, what's good for this company, in terms of higher commodity prices, is not good for manufacturers now unable to pay for the raw materials:
"At the other extreme of our supercycle, just two days earlier BlueScope Steel announced plans to shut a blast furnace and more because of the same economic forces that have enabled BHP to make net profit at a rate of $710 a second".
Tony Maher, president of the CFMEU union, also accused BHP of making profits at the expense of investing in Australian jobs and communities, which had been left without decent roads, affordable housing, or facilities for families.
Said Mr. Maher:
"Mining giants like BHP love to spin their contribution to the national economy but they've demonstrated they have to be dragged kicking and screaming to pay their fair share."
BHP posts biggest profit in corporate history
ABC News
24 August 2011
BHP Billiton has unveiled the biggest profit in Australian corporate history.
The world's largest miner produced a net profit of $22.5 billion for the 12 months to June 30.
The company's revenue increased over 35 per cent and the results were broadly in line with analysts' expectations.
BHP said the result would have been stronger if not for weather-related disruptions in the supply of coal and iron ore.
Despite that the company says it has managed record commodities production.
"Robust demand, industry-wide cost pressures and persistent supply-side constraints continued to support the fundamentals for the majority of BHP Billiton's core commodities," it said in a statement on Wednesday.
"Another strong year of growth in Chinese crude steel production ensured steelmaking material prices were the major contributing factor to the $US17.2 billion price-related increase in underlying earnings."
Chief executive Marius Kloppers said the miner was well placed to benefit from the rapid industrialisation of countries like China.
"However, despite these near-term challenges we remain confident that over the longer term the ongoing process of urbanisation and industrialisation in the populous developing world will continue to drive demand for our commodities," he said.
BHP said its investment in its flagship Australian iron ore operations through the depths of the global financial crisis had delivered an 11th consecutive year of production growth "as prices continued to test new highs".
Record production
Record production was also achieved at its Australian thermal coal operations and was accompanied by a 13 per cent boost in output in South Africa.
But the resources giant warned of global skills shortages and said supply-side tightness was expected to begin easing in "several commodities", also sounding a warning on worldwide instability.
"Global imbalances and high levels of sovereign debt continue to create uncertainty and a protracted recovery remains our base case assumption for the developed world," the company said.
"However, a coordinated policy response has the potential to engender confidence and ease the volatility that has been the dominant theme of recent years."
The miner will deliver a final dividend of 52 cents, fully franked.
The Construction, Forestry, Mining and Energy Union (CFMEU) said the mining giant's profit, up 85.9 per cent from the previous financial year, came at the expense of investment in Australian jobs and communities.
"There are healthy profits and then there are super profits," CFMEU national president Tony Maher said in a statement.
"Mining giants like BHP love to spin their contribution to the national economy but they've demonstrated they have to be dragged kicking and screaming to pay their fair share," Mr Maher said.
He said Australia had mining communities without decent roads, affordable housing or facilities for families, despite the massive profits made by mining companies.
BHP Billiton to invest $437m to expand Colombian coal mine
Energy Business Review
19 August 2011
Mining and oil company BHP Billiton will invest $437m to expand the Cerrejon Coal mine in La Guajira, Colombia.
The company's investment represents one third of the $1,311m expansion to be undertaken by Cerrejon Coal, with JV partners Anglo American and Xstrata contributing equal investment in the project.
Construction on the expansion project, known as the P40 Project, will begin later this year with completion expected in 2013.
According to BHP Billiton, the expansion will enable Cerrejon Coal's saleable thermal coal production capacity to increase by eight million tonnes per annum (mtpa) to about 40mtpa.
Ramp up to expanded capacity of 40mtpa is expected by the end of 2015, the company said.
The scope of the project includes expansion of the mine, coal handling facilities and the port, inclusive of an additional loading berth.
BHP Billiton owns a 33.3% stake in Cerrejon Coal in equal portion with JV partners Anglo American and Xstrata.