SYDNEY - Mining giant BHP reported an 86 per cent slump in half-year net profit on Feb 20, hit by a write-down of its nickel assets and costs related to a 2015 Brazilian mining disaster.
Sales rose 6 per cent to US$27.2 billion (S$36.6 billion) in the six months to Dec 31 when compared with a year earlier, the Anglo-Australian firm said.
But net profit slumped 86 per cent to US$927 million in the same period as it took a hammering from exceptional items.
BHP posted losses of US$2.47 billion on write-downs of its nickel assets in Western Australia and another US$3.17 billion over the fatal collapse of the Samarco iron ore tailings dam in Brazil.
BHP said its underlying profit for the period was US$6.6 billion, however, barely changed from a year earlier.
“We’ve seen volatility in global commodity prices, and demand in the developed world has been softer than expected,” said BHP chief executive Mike Henry.
“That said, China demand is healthy despite weakness in housing, and India remains a bright spot.”
The group announced last week that it was writing down its Western Australian nickel assets because of a market slide caused by a surge in exports from Indonesia.
Nickel is essential to the manufacture of stainless steel and of the batteries that are fuelling the world’s transition to greener energy.
But prices have dropped about 40 per cent in the past year as new refining techniques enabled low-quality nickel from Indonesia to be used for batteries.
In January, a Brazilian court ordered miners Vale and BHP to pay US$9.56 billion over a dam collapse at their Samarco joint venture iron ore mine.
The dam failure at their mine in the south-eastern town of Mariana released nearly 40 million cu m of toxic sludge, flooding 39 homes and killing 19 people.
BHP said on Feb 20 that the joint venture partners had filed a “clarification motion” over the court order, citing “certain factual inaccuracies in the decision, including the calculation of damages”.
BHP Brasil also intends to appeal the decision, challenging the merits and the amount of damages, it said, estimating that a decision could take two to five years. AFP
