BHP, the world’s largest mining company, has reported a 23% decline in profit for the first half of the year. The company’s underlying attributable profit fell to $5.1 billion, despite an increase in copper, iron ore, and steelmaking coal sales.
The decline in profit was mainly due to low iron ore and steelmaking coal prices. However, copper production increased by 10% year on year, making up a greater proportion of BHP’s earnings.
BHP CEO Mike Henry said that the company is focusing on organic growth, rather than mergers and acquisitions, due to challenging market conditions. “It’s increasingly challenging to do large M&A for value,” Henry said.
The company has invested $5.2 billion in capital and exploration expenditure, with a focus on growing its exposure to copper and potash. BHP plans to invest about 65% of its medium-term capital on these “future-facing commodities.”
Henry also noted that the company is seeing early signs of recovery in China, strong growth in India, and a resilient economic performance in the US. However, potential trade tensions and sluggish industrial activity could threaten the recovery in developed economies.