BHP takes profit hit, plans to sell mines

BHP has revealed plans to sell coal assets in Queensland, New South Wales and South America while reporting a dip in full-year profit.

Commodity price volatility, the coronavirus pandemic and social unrest in Chile, where it operates the world’s biggest copper mine, all contributed to the slide.

The mining giant posted a net profit of $Us7.96bn ($A11.03bn) for the 12 months to June 30, down 4 per cent from the 2019 financial year.

BHP chief executive Mike Henry said fiscal 2020 had been challenging, but the company’s operations had generated robust free cashflow and net debt was at the low end of its target range.

“We expect most major economies will contract heavily in 2020, China being the exception,” he warned.

“Recovery will vary considerably by country.

“Our diversified portfolio and high-quality assets position us to continue to generate returns in the face of nearterm uncertainty.”

Matthew Moore, from Moody’s Investors Service, said BHP’S results were strong and supported by its iron ore operations, which benefited from higher prices and production and helped offset considerable earnings falls for petroleum and coal.

Mr Henry also said the company wanted to exit its BMC mines in Queensland, Mt Arthur mine in the Hunter Valley and Cerrejon operation in Columbia, saying it wants to concentrate its coal portfolio on higher-quality coking coals.

BHP also seeks to improve its petroleum portfolio by getting rid of mature assets including the Bass Strait oil and gas field.

The company issued a final dividend of 55 US cents per share, down 23 US cents from last financial year.