SINGAPORE BHP Billiton Plc posted a 57.8-percent slump
in profit in its fiscal-2013 first half on substantially lower
commodity prices, a weak dollar and inflation despite stronger
volumes and operating cost savings, the global miner said Feb.
The London-based miner logged net income of $4.24 billion for
the six months ended Dec. 31, down 57.8 percent from the
year-prior period. Revenues slipped 14.1 percent in the first
half to $32.2 billion vs. $37.5 billion in the same comparison.
The company took one-time impairment charges of $1.44 billion
on its aluminum and nickel assets, following other miners such
as Rio Tinto Plc in writing down underperforming assets (
amm.com, Feb. 14
BHP said it had curbed costs by $944 million in the first six
months of its fiscal year but did not outline future targets
for cost cuts.
Last May, BHP said it would shelve its plan to spend $80
billion through 2015 on development and expansion projects.
Rival miner Rio Tinto Plc plans to cut costs by more than $5
billion by the end of 2014.
The global economy looks set to benefit from a period of
improving economic growth, BHP said. China will
remain the primary driver of commodities demand and its
cyclical recovery is in place.
BHP added that demand growth rates for many of its core
products within China were expected to remain in the range of 2
to 4 percent per year.
A robust supply growth in copper is expected to result in a
more balanced market in the near term, BHP said. (Copper)
prices will need to remain high enough to induce development of
lower-grade, higher-cost supply, the company said.
However, BHP expects iron ore prices to remain
volatile in the short term.
Aluminum is expected to remain in overcapacity as Chinese
aluminum producers continue to expand aggressively, it said.
Captive low-cost power in the western provinces has
enabled Chinese capacity to shift down the cost curve, it
said, adding that the cost curve will further flatten,
and the price is expected to remain below the marginal cash
cost of production.
A version of this article was first published by AMM
sister publication Metal Bulletin.