BHP blamed inflation and weak commodity costs for a drop in earnings throughout the second half of final yr however stated that “strengthening exercise” in China offered room for optimism within the yr forward.

The Australian miner’s income fell 16 per cent to $25.7bn, and attributable revenue was down 32 per cent, throughout the six months to December 31 in comparison with the identical interval a yr earlier than.

“Commodity costs are down — this can be a cyclical business in any case,” chief government Mike Henry instructed the Monetary Instances. “However the underlying efficiency of the enterprise is admittedly sturdy,” he added, pointing to elevated copper manufacturing for example.

Inflation added about $1bn to its prices via elements corresponding to increased diesel costs.

On the similar time, costs for iron ore, which generally accounts for greater than half of BHP’s earnings, had been about 25 per cent decrease throughout the interval in comparison with a yr earlier than.

Inflation and labour shortages pushed up the worth of mining Western Australian iron ore to $18.30 a tonne, up from $16.15 in 2021.

Nonetheless, the corporate struck a notice of optimism in its outlook for China, pointing to strengthening exercise there now that pandemic restrictions had ended.

Demand from China and India will likely be “stabilising counterweights” to the slowdown within the US and Europe, Henry stated.

“This will likely be one other yr of a billion tonnes plus, for Chinese language metal manufacturing, presumably a rise on final yr,” he added.

Iron ore costs have risen practically 30 per cent since November as Chinese language mills have began to restock and as exercise picks up.

Henry additionally welcomed the current information that China had relaxed an unofficial ban on imports of Australian coal. “We’re very inspired by the development in commerce relations,” he stated, including that BHP was “prepared to interact with Chinese language prospects”.

BHP introduced a dividend of US$0.90 per share, or $4.6bn, the fifth-highest half-yearly dividend in its 138-year historical past.