BHP set to sell more Australian coal mines as profit falls

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

BHP, the largest Australian mining company, told investors on Tuesday that its underlying profit for the six months to December had fallen by 32 per cent to a weaker-than-expected $US6.5 billion ($9.4 billion) amid rising costs and COVID-19 lockdowns in China pummelling the price of iron ore.

Shareholders will receive an interim dividend of US90¢ a share ($1.30), down from $US1.50 it paid out at the same time last year. BHP shares were down around 2 per cent in early trade.

BHP on Tuesday confirmed it had launched a process to sell its Daunia and Blackwater metallurgical coal mines that it jointly owns with Mitsubishi in Queensland.

The move is the latest sign of the company repositioning its portfolio away from fossil fuels and towards what it terms “future-facing” commodities, such as metals that will be needed as raw materials in renewable energy and electric cars. Since 2021, the company has sold off one of its last-remaining thermal coal mines, a series of metallurgical coal mines and its entire global oil and gas division.

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BHP’s remaining coal assets include the Mount Arthur thermal coal mine in the NSW Hunter Valley, which it plans 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 chief executive Mike Henry said operating performance had been solid across the period, including a record half-year of production of the steel-making material iron ore from its mines in Western Australia.

“BHP remains the lowest-cost major iron ore producer globally,” he said.