BHP announces record dividend as miner buoyed by Chinese demand

Mining giant BHP has declared a record interim dividend after it reported its strongest first-half profit in seven years.

The company said its profits were buoyed by strong demand for iron ore from China, with strong steel production in the far east bumping up the prices of raw materials.

Mike Henry, chief executive of BHP, hailed the trading performance as a “strong set of results”.

As a result, shareholders in the Anglo-Australian company will be handed a payment of 1.01 dollars per share in total payout worth around 5.1 billion dollars, up from 0.65 dollars a share year ago.

BHP said it saw record production at Western Australia Iron Ore, which include five connected mines.

It said this helped drive the increase in underlying like-for-like profits to six billion dollars for the last six months of 2020, up from 5.2 billion dollars in the same period last year.

However, its profits were still marginally below analyst consensus.

Last month, the company, which employs around 80,000 people, became the most valuable company in the FTSE 100 for the first time after its strong performance during the pandemic.

Mr Henry told investors that the outlook for economic growth and commodity demand “remains positive” despite the pandemic.

“These factors, combined with population growth and rising living standards, are expected to drive continuing growth in demand for energy, metals and fertilisers,” he said.

“Our leadership team is in place and accelerating our agenda to be safer, lower cost and more productive.

“We are well positioned, with a portfolio of essential products that will support a cleaner and more prosperous world while generating sustainable returns for our shareholders and value for our communities.”