Source Pravda.Ru

BHP in profit

BHP Billiton, the world's biggest mining company, posted a 76 percent increase in second-half profit as rising demand in China helped propel prices of copper, coal, iron ore and oil to records.

Net income rose to $3.6 billion in the six months ended June 30, from $2.04 billion a year earlier. Second-half profit was calculated by subtracting first-half net income from full-year earnings reported today by Melbourne-based BHP Billiton. Profit was in line with analysts' expectations, according to Bloomberg.

Chief Executive Charles “Chip” Goodyear, 47, is spending as much as $11.9 billion expanding mines and paid $7.2 billion in June for WMC Resources Ltd. to tap soaring Chinese demand. China will continue to be the company's strongest market, with demand led by iron ore and coking coal, Goodyear said today.

“We've seen commodity prices up very strongly in the year, with the biggest gains in the bulk commodities, particularly iron ore,” said Paul Xiradis, who helps manage the equivalent of $2.3 billion at Ausbil Dexia Ltd. and holds BHP stock. “The results were in line with expectations. They've also said Chinese demand remains strong.”

The second-half result compares with the $3.6 billion median estimate of eight analysts surveyed by Bloomberg.

The jump outpaced the 34 percent increase in profit at rival Rio Tinto Group in the six months ended June, and compared with a 17 percent decline in earnings at Anglo American Plc.

The major negative for the company is rising costs associated with project expansion, particularly in Australia where a resources boom has led to shortage of skilled labor as resources companies seek to take advantage of an expected prolonged upswing in the commodity price cycle.

It said it is continuing to see capacity utilization rates at extremely high levels and the resources industry continues to suffer from a lack of latent capacity to act as swing production, Forbes reports.

'This lack of capacity is compounded by logistical and infrastructure bottlenecks in many regions and this, combined with the pressure on construction and operating costs translates to a higher risk of supply side shocks than would otherwise be the case,' BHP Billiton said.

It said a track record of bringing on material levels of new production over the past four years has illustrated the unrealised option value within its resource base.

Representatives of the North Korean administration issued a statement saying that the United States and its allies have lost the "political and military confrontation" to the DPRK

North Korea declares victory over USA

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