Hot profit for BHP coal

billion. It will pay a fully franked dividend of US40¢ a share, up from US16¢ last year.

The mining giant also announced a bond repurchase plan of up to $US2.5 billion, targeting the 2018, 2019, 2021, 2022 and 2023 US dollar denominated notes and be funded by BHP Billiton’s $US14 billion cash position.

The Queensland Government reaped $US335 million in royalties, up from $US98 million the previous year. It fol- a spectacular half year in which spot prices for hard coking coal reached a record $US310 a tonne. The company said its average realised price was $US179 a tonne for hard coking coal.

The company said it expects prices to settle back to “industry marginal cost’’ as China’s supply constraints are eased.

“The application of China’s coal supply reform policy is a source of short-term uncertainty,’’ the company said. “We expect emerging markets such as India will provide long term seaborne demand growth.”

Queensland coal almost doubled its revenue to $US3.38 billion and its cash costs continued to fall with a drop in the half of 4 per cent to $US56 a tonne which it attributed to decreased labour and contractor costs, favourable inventory movements and increased utilisation of its washplants. It expects the costs to fall further in 2017. The comlowed pany produced a productivity gain throughout the business of $US1.2 billion.

BHP Billiton chief executive Andrew Mackenzie said it was a strong result following several years of “a considered and deliberate approach’’ to improve productivity.

“Our steadfast commitment to this plan has positioned us to take full advantage in a period of higher prices with underlying EBITDA up 65 per cent to $US9.9 billion,’’ he said.