Demand for Commodities Sends BHP Billiton Profits Soaring

The world’s largest diversified miner BHP Billiton reported an 85 percent rise in second-half profit to $3.7 billion for the year ended June 30, boosted by strong global demand for industrial commodities, and forecast continuing high prices for commodities in fiscal 2006.

The profit rise reflects the strength of demand for industrial minerals such as copper and iron ore, particularly in China that is seeing strong economic growth.

BHP Billiton is predicted to see high profits again in fiscal 2006, to as much $9 billion, buoyed by global demand for commodities. Demand for WMC's three key commodities - nickel, copper and uranium - has never been stronger.

As for its diamonds and specialty products unit, earnings before interest rose 1.7 percent to $417 million from fiscal 2004.

Although the company enjoyed higher realized prices for diamonds, which rose 38 percent on a year earlier, these were offset by lower diamond sales volumes that were down 19 percent on the year, higher costs of processing lower grade material and the unfavorable impact of the stronger Canadian dollar to the US dollar exchange rate.

BHP Billiton, which owns 80 percent of the Ekati mine in Canada’s North-West Territories, declared a final dividend of 14.5 cents.

Shares in BHP Billiton, traded in London and Australia, have jumped about 40 percent since the start of this year, far ahead of the gains seen on the broader share markets in those countries.