The Nickel West and West Musgrave writedown – the result ofa global crash in nickel prices – and the charge against Samarco undermined what was otherwise a solid operational performance amid overall healthy commodity prices.
The company increased revenue by $US1.5 billion,largely off the back of higher iron ore and copper prices as well as its Oz Minerals acquisition of the Prominent Hill and Carrapateena mines. The revenue boost was partly offset by New South Wales Energy Coal where,despite a 43 per cent jump in sales volumes,realised prices fell by 65 per cent.
BHP’s underlying profit was $US6.6 billion,but the $US5.6 billion nickel write-off and Samarco charge cut that result by 86 per cent to $US972 million,its lowest in eight years. Revenue was up 6 per cent to $US27.23 billion,and the miner said it will pay an interim dividend of $1.10 per share – the lowest since 2020.
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As a result of the collapse in nickel prices,BHP is reviewing its Australian nickel mines,smelter and refinery and may shut them for the foreseeable future,putting more than 3000 jobs at risk,although it has yet to decide a course of action. “It’s really too early to call yet,” Henry said about the number of employees likely to be affected.
“We have a smelter and refinery. It’s a much more complex decision to look at how you move those into a period of care and maintenance and preserve the realistic ability to move them out of care and maintenance in due course,” he said.
The review follows asurge in nickel supply out of Indonesia last year that slashed global prices and shuttered Australia’s nickel sector seemingly overnight,prompting the closure of a handful of mines and crisis talks between the Albanese government and industry about production tax credits to support the sector.