[miningmx.com] – BHP BILLITON, the world’s largest miner, booked its
first profit decline in three years as China continued to slow, a condition that
underpinned the group’s decision to review its proposed $20bn Olympic Dam copper
expansion.
In addition to slowing China demand, which is BHP Billiton’s largest customer, the
company was forced to commit $2.5bn in writedowns on its shale gas and nickel
assets and charges on projects, including Olympic Dam.
The group’s second-half attributable profit before exceptional items fell to $7.16bn
from $10.98bn a year earlier, according to Reuters. That was slightly ahead of
analysts’ forecasts of around $6.96bn, the newswire said. BHP’s full-year profit to
the end of June fell to $17.1bn from $21.7bn a year earlier.
BHP Billiton CEO, Marius Kloppers, said the company needed to review its Olympic
Dam expansion set for project approval in December owing to the tough market
conditions.
“As we finalised all the details of the project in the context of current market
conditions, our strategy and capital management priorities, it became clear that the
right decision for the company and its shareholders was to continue studies to
develop a less capital-intensive option to replace the underground mine at Olympic
Dam,” Kloppers said.
Other projects that might be imperilled by slowing demand, which also hit earnings
for the group’s iron ore, copper, coal, nickel and aluminium divisions, were its Outer
Harbour iron ore development in Australia, and the Jansen potash project in Canada.
Olympic Dam is a project in Australia.
BHP Billiton said in May it was reviewing $80bn worth of expansions and projects as
China’s economic growth slowed to its lowest level in 10 years.
BHP Billiton raised its final dividend by 2 cents to 57 cents, but that was below
analysts’ forecasts of around 58 cents, which was seen as a sign of caution on the
outlook, Reuters said.
