BHP, an Australian multinational, reported a 32% drop in its net profit to $6.46 billion for the six months to December 31, 2020. This was due to a fall in copper and iron ore prices, inflation and the Queensland government’s decision to raise coal royalties to the highest level in the world. Sales also decreased by 16% to $25.7 billion in the same period.
In spite of the global economic slowdown, BHP President Mike Henry is “positive” about the outlook for the coming year. He believes that the demand for basic products from China and India will provide a stabilizing effect to the declining global trade and the economies of the US, Japan and Europe.
BHP also sees a long-term future for metallurgical coal, which it states will help reduce carbon emissions compared to coal from lower quality sources. Despite the trend towards eliminating carbon emissions, the company believes that high-quality metallurgical coal will be used in steelmaking furnaces for many years to come.