profit falls; Daunia, Blackwater mines are sold

Mining giant BHP has revealed plans to sell two more of its Australian coal mines as it posted a sharp fall in half-year profit.

BHP, Australia’s largest mining company, told investors Tuesday that its underlying earnings for the six months to December fell 32 percent to a weaker-than-expected $6.5 billion ($9.4 billion) following strict COVID-19 lockdowns billion US dollars) in China and concerns about an economic slowdown weighed on iron ore prices.

Shareholders will receive an interim dividend of $90 per share ($1.30), compared to $1.50 paid at the same time last year. BHP shares lost around 2 percent in early trade.

BHP confirmed on Tuesday it has initiated a process to sell its Daunia and Blackwater metallurgical coal mines, which it jointly owns with Mitsubishi in Queensland.

The move is the latest sign that the company is rebalancing its portfolio away from fossil fuels and toward so-called “future-ready” commodities like metals, which are needed as feedstocks for renewable energy and electric cars. As of 2021, the company has sold one of its last remaining thermal coal mines, a number of metallurgical coal mines and its entire global oil and gas division.

BHP’s remaining coal assets include the Mount Arthur thermal coal mine in the NSW Hunter Valley, due to close in 2030, and the nine coking coal mines it owns through the BHP-Mitsubishi joint venture in central Queensland.

Releasing the company’s half-year results on Tuesday, BHP CEO Mike Henry said operating performance had been solid throughout the period, including record half-year production of the steel material iron ore from its mines in Western Australia.

“BHP remains the world’s largest iron ore producer with the lowest costs,” he said.

“We have continued to make great strides in executing our strategy, including developing growth options.”