The Anglo-Australian firm BHP Billiton has shown its profits rise by 12.4% during the fiscal year ended in June. It’s a record annual profit from the mining giant that it announced for the seventh consecutive year on the back of swelling commodity prices.
According to BHP predictions, the demand for commodities will be strong in the longer term, however the worldwide economy will move sluggishly in the near term.
Currently, the EU is inquiring BHP’s $170bn proposal for rival Rio Tinto.
If there is a tie-up between Rio and BHP, it would create a company with a one-third of the world’s iron-ore market.
On the other hand, Rio Tinto has turned aside the hostile bid considering the amount too small to meet the value of its assets.
It was the increased production of iron ore, copper alloy, manganese ore and alumina that bolstered BHP’s profits. However, BHP told that higher oil and other commodities prices also contributed to the results and some of the gains were offset because of high energy, fuel and shipping costs.
During the recent weeks, the prices of commodities have fallen that also led to speculation that demand for natural resources would fade as well. But BHP is quite confident that it wouldn’t be a case.
The firm said that if there was any fall in demand for commodities from a slowdown in developed economies, it would be offset by strong demand from the emerging economies.
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