(Bloomberg) -- BHP Group, the world's biggest miner, posted its highest ever full-year profit on record commodity prices and will push ahead with growth options on a stronger demand outlook in China.
Most Read from Bloomberg
Saudi Billionaire Made $500 Million Russia Bet at War Onset
Wells Fargo Plans Major Retreat From Mortgage Business It Long Dominated
Much of the US Will Be an 'Extreme Heat Belt' by the 2050s
Will Housing Prices Flatten - or Collapse?
'Next Generation' Moderna Coronavirus Booster Jab Approved for Use in Adults
The producer will study plans to expand its top-earning iron ore unit to 330 million tons of production a year, and is continuing to assess options to lift volumes in copper and nickel, Melbourne-based BHP said Tuesday in a statement. A giant new potash mine in Canada remains on track to begin production in 2026.
"We expect China to emerge as a source of stability for commodity demand in the year ahead, with policy support progressively taking hold," Chief Executive Officer Mike Henry said in the statement. China typically accounts for more than 60% of BHP's revenue.
Rivals have cautioned over a weaker outlook and Rio Tinto Group last month reported a decline in first-half profits and halved its dividend. Gold giant Newmont Mining Corp. and copper producer First Quantum Minerals Ltd. have also warned investors in recent weeks on the impact of inflationary pressures.
Though BHP will face pressure from a slowdown in advanced economies, higher costs and tighter labor markets, there will be opportunities for low-cost miners as inflation also drives prices higher, the company said in its statement. Unit production costs across major assets rose 13% on Covid-related issues and higher prices of diesel and electricity.
The producer is aiming to seize on any pressure on competitors to add metals tied to clean energy and electric vehicle supply chains. A takeover approach that valued copper producer OZ Minerals Ltd. at about A$8.4 billion ($6 billion) represented compelling value given the "deteriorating external environment," Henry said last week. Adelaide-based OZ Minerals has rejected the offer as too low.
Read more: BHP Returns to Major M&A in Hunt for EV and Clean Energy Metals
Total underlying earnings were $23.8 billion in the year to June 30, the beating an average analyst forecast of $21.6 billion, and the highest since the current company was created in a 2001 merger. The producer will pay a record final dividend of $3.25 a share.
(Updates with CEO comment in third paragraph)
Most Read from Bloomberg Businessweek
Whole Foods' Battle Against Black Lives Matter Masks Has Much Higher Stakes
Being Thrown Off Social Media Was Supposed to End Alex Jones's Career. It Made Him Even Richer
London Lures Top Facebook Executives
Startups That Grew Fast Learn Shrinking Can Be Just as Hard
The Work-From-Home Revolution Is Also a Trap for Women
©2022 Bloomberg L.P.