Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
Anglo-Australian giant BHP Billiton reported a 47% decline in half-year profits on Monday and vowed to continue cost-cutting as it battles declining prices across a range of commodities.
The world’s largest mining company headquartered in Melbourne, Australia announced better than expected net profits of $4.27 billion for the six months through December, down from a $8.11 billion profit a year earlier.
The company reported “productivity gains” (read: cost reductions) at a “faster pace than initially anticipated” with $2.4 billion achieved during the second half of last year. BHP is targeting at least $3 billion during the current financial year and $4 billion of savings by the end of the 2017.
The weak iron ore price saw the company, the world’s third largest producer of the steelmaking raw material, slash unit cash costs by 29% at its Western Australia Iron Ore unit to approaching $20 a tonne.
Thanks to increased output of 15% to a record 124 million tonnes, iron ore revenues came in at $8.4 billion compared to nearly $11 billion in the corresponding period in 2013 despite average realized price of $70 a tonne last year versus $112 the year before. Metallurgical coal production was also at a record pace during the six months of 26 million tonnes.
The 50% slide in the crude oil price during the reporting period forced BHP to take a $938 million charge on the value of assets, with the bulk ascribed to oil fields in North Louisiana and unconventional gas assets. Oil contributes roughly a quarter of the company’s earnings.
BHP reduced capital and exploration expenditure by 23% to $6.4 billion in the half year and plan to invest a total of $12.6 billion in the 2015 financial year before slashing outlays again for $10.8 billion in the 2016 financial year.
Despite the tough conditions BHP, which has a market value of $132 billion, said it would lift its interim dividend 5% to $0.62 a share.
BHP, intends to spin off assets including nickel pits and aluminum smelters into a separately listed company, named South 32, by midyear adding that the proposed demerger would allow it to further improve its underlying payout ratio.
