Top miner’s profit boosts local bourse

BHP-Billiton posts $13.7bn bonanza as prices and production rocket. BHP-Billiton ended the JSE’s losing streak yesterday after reporting that its attributable profit grew 35percent to $13.7-billion in the year to the end of June. The world’s biggest miner reported record annual production of eight major commodities, the prices of which are at three-decade highs. BHP-Billiton is listed on the London, Australian, New York and Johannesburg stock exchanges. On the JSE, BHP-Billiton’s market capitalisation of about R485- billion places it second to Anglo American, which has a capitalisation of about R558-billion. The share prices of both of the global mining giants gained more than 4percent yesterday. BHP-Billiton said its customers did not expect a world credit squeeze to have a big effect on their requirements for raw materials. The company said: “In 2007, real prices for all our major commodities remained at their highest since the 1970s as Chinese demand for raw materials continued.” Marius Kloppers, who takes over from Chip Goodyear as chief executive in October, said BHP- Billiton would continue to invest in copper, iron ore, coking coal and petroleum, among other commodities. BHP-Billiton will consider making acquisitions, but Kloppers refused to comment on whether he had talked to aluminium giant Alcoa in the wake of Rio’s takeover of Alcan. BHP-Billiton declared a final dividend of US27c, up 46percent on the previous year and well above market expectations of about 23c. Costs, excluding non-cash costs, have risen 3.6percent in a year, with increases for labour, contractors’ fees, raw materials, fuel, energy and other inputs. Analysts said BHP-Billiton appeared to be managing cost pressures well. “The net non-cash cost increase of only 3percent is encouraging and confirms the declining trend of cost increases BHP-Billiton has highlighted in previous briefings,” said Rob Craigie, senior analyst at broker FW Holst. BHP-Billiton, which has earmarked more than $2-billion for new projects, said commodity prices were expected to remain high but volatile in the short term. The company forecast strong growth in sales of petroleum, base metals, iron ore and stainless steel. Copper prices on the London Metals Exchange are at about 7000 a ton after retreating from above 8000 on global credit market worries.