Record £4.9bn loss at world’s biggest miner

A TrIPLE whammy of woe propelled BHP Billiton to its worst ever loss – but its chief executive insisted commodities were no longer in free-fall.

The world’s biggest miner blamed the collapse in metal prices, a burst dam in Brazil and falling oil prices at its petroleum business as it tumbled £4.9bn into the red.

This annual loss – the worst in its 165-year history – compared with profits of £1.4bn the previous year.

BHP was hit with one-off charges of £5.9bn and slashed its final dividend by 76pc in a blow to shareholders and pensioners with savings tied up in the company. Shares rose 0.7pc, or 7p to 1049.5p on relief that the results were not even worse.

BHP boss Andrew Mackenzie said the rout in the commodity market appeared to be over.

‘The fact is that there is some sense that prices have stopped falling as opposed to being in free-fall,’ he said.

However, he did warn that it was too early to say the worst was over for the industry, and he expected markets to remain volatile.

BHP said the average price of oil was 43pc lower than in the previous year while iron ore was down 28pc, copper 23pc and coal 22pc.

‘The last 12 months have been challenging for both BHP Billiton and the resources industry,’ said Mackenzie. ‘While commodity prices are expected to remain low and volatile in the short to medium term, we are confident in the long-term outlook for our commodities, particularly oil and copper.’

Annual sales fell to £23.8bn from £33bn and it proposed a dividend of 23p a share, down from 95p.

In november, the Bento rodrigues dam in Minas Gerais, Brazil collapsed. It was owned and managed by Samarco, a joint venture between Vale and BHP. On the front page of its update, BHP boasted that ‘there were no fatalities at our operated sites in the 2016 financial year’.

However, inside the document it admitted there had been 19 deaths at Samarco. ‘Sadly, authorities have confirmed 19 fatalities, of which five were members of the community and 14 were people who were working on the dams at the time of the dam failure,’ it said.

A spokesman said: ‘The mine was independently managed. We didn’t operate the mine. We have not tried to walk away and hide from this. It is the first thing we talked about to investors and it is on the second page of our update.’

The firm is also one of the few miners with exposure to the falling price of crude. It attempted to diversify by developing a petroleum business specialising in fracking.

This is the controversial process of pumping high-pressure water and sand underground to fracture rock and release valuable new energy reserves known as shale gas.

However, the division slid to a loss because it scaled back production due to the low price of oil.

Separately, cost cutting at Londonlisted Antofagasta helped the Chilean copper miner to post a small rise in half year figures.

The shares increased 8.7pc, or 44.5p to 558.5p after operating profit rose to £438m from £428m despite an 18.5pc fall in sales to £1.1bn.

Antofagasta cut capital expenditure by 42pc to £296m.

The company resumed dividend payments for the first time in a year, declaring an interim dividend of 2.38p per share.