BHP Billiton has announced a profit for the first half of FY17 thanks to a major surge in commodity prices.
The miner this week announced a $4.2 billion net profit, compared to a $7.8 billion loss in the first half of last financial year.
It said it had achieved productivity gains of roughly $1.5 billion during the six-month stretch.
Chief executive Andrew Mackenzie said the “strong result” followed several years of a considered and deliberate productivity and consolidation program.
“Our steadfast commitment to this plan has positioned us to take full advantage in a period of higher prices with underlying EBITDA up 65% to US$9.9 billion,” he said.
Mackenzie credits the demerger of South32 last year, along with around US$7 billion in asset sales, with a BHP Billiton portfolio “that is now true to its strategy”.
“Our assets are large, long-life and low-cost,” he said.
“[They] provide exposure to a diverse mix of commodities with an attractive outlook.
“Our new operating model has sharpened the focus of our operations on the things that matter most: safety, volume and cost.”
The mining chief also gave a positive outlook for the future.
“We are confident in the long-term outlook for our commodities, particularly oil, with markets expected to rebalance in the near-term, and copper where we expect a deficit to emerge in the early 2020s,” he said.
“We have the right settings in place to substantially grow shareholder value.”
BHP anticipates the iron ore market will “come under pressure” in the short-term due to moderating Chinese steel demand growth, but said the long-term outlook for steel production remained positive.
For coal, the mining giant believes emerging markets such as India will provide long-term seaborne demand growth, while high-quality metallurgical coals will continue to offer steel makers value-in-use benefits.