20 Feb 2024, 08:50

BHP profit dives after hits from nickel, Brazil mine disaster

SYDNEY, Feb 20, 2024 (BSS/AFP) - Mining giant BHP reported an 86 percent slump in half-year net profit on Tuesday, hit by a writedown of its nickel assets and costs related to a 2015 Brazilian mining disaster.

Sales rose six percent to US$27.2 billion in the six months to December 31 when compared to a year earlier, the Anglo-Australian firm said.

But net profit slumped 86 percent to $927 million in the same period as it took a hammering from exceptional items.

BHP posted losses of $2.47 billion on writedowns of its nickel assets in Western Australia and another $3.17 billion over the fatal collapse of the Samarco iron ore tailings dam in Brazil.

BHP said its underlying profit for the period was $6.6 billion, however, barely changed from a year earlier.

"We've seen volatility in global commodity prices, and demand in the developed world has been softer than expected," said BHP chief executive Mike Henry.

"That said, China demand is healthy despite weakness in housing, and India remains a bright spot."

The group announced last week that it was writing down its Western Australian nickel assets because of a market slide caused by a surge in exports from Indonesia.

Nickel is essential to the manufacture of stainless steel and of the batteries that are fuelling the world's transition to greener energy.

But prices have dropped about 40 percent in the past year as new refining techniques enabled low-quality nickel from Indonesia to be used for batteries.

Last month, a Brazilian court ordered miners Vale and BHP to pay $9.56 billion over a dam collapse at their Samarco joint venture iron ore mine.

The dam failure at their mine in the southeastern town of Mariana released nearly 40 million cubic metres of toxic sludge, flooding 39 homes and killing 19 people.

BHP said Tuesday that the joint venture partners had filed a "clarification motion" over the court order, citing "certain factual inaccuracies in the decision, including the calculation of damages".


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