BHP Billiton breaks profits record again

Mining giant BHP Billiton has announced record annual profits for the seventh consecutive year as commodity prices continue to soar.   ┬á The Anglo-Australian mining conglomerate saw profits rise by 14.7 percent to $15.4 billion in the year to 30 June, up from $13.42 billion the previous year, as a result of higher prices and production volumes.┬á┬á BHP's profits were boosted by increased production of copper, iron ore, manganese and alumina, but the company said that while higher commodity prices had helped its results on the one hand, rising energy, fuel and shipping costs had also offset some of the gains. ┬á┬á BHP said its costs had risen by $1.18 billion in the year, with about $575 million of this due to higher fuel, energy and raw material costs.┬á┬á Commodity prices have fallen in recent weeks, leading to speculation that demand for natural resources may be on the wane, but BHP said it was confident that this was not the case. China's continuing industrialization is providing solid support to the global economy and demand for raw materials remains strong, the company said.┬á┬á BHP predicted that although the global economy would slow in the near term, demand for commodities would remain strong in the longer term. Any fall in demand from the slowdown in developed economies should be offset by "strong demand from the emerging economies." ┬á┬á "China has been the main driver for demand and while there has been a bit of a slowdown, we're confident that it will continue to have high demand for decades to come," said chief executive Marius Kloppers. ┬á┬á Kloppers added that BHPÔÇÖs proposed takeover of Rio Tinto now made "more sense than ever" in the light of intensifying cost pressures in the industry. "While there are enough resources to satisfy the world's appetite, the industry has not moved quickly enough to meet the growth in demand," he said.┬á┬á A tie-up between BHP and Rio would create a firm with a third of the world's iron-ore market, which has raised fears that it would be too powerful. Rio has resisted the hostile bid, saying the amount offered did not meet the value of its assets. ┬á┬á Rio Tinto releases its first half results next week.  Read BHP Billiton's statement in full here.  ┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á