SYDNEY -- BHP Billiton recorded a net profit of $5.89 billion for the year ended June, the Anglo-Australian miner announced Tuesday, its first black ink in two years thanks to strong demand for raw materials from steel-hungry China.
Chinese steel demand helped BHP rebound from a $6.3 billion loss the year earlier by raising prices for key materials like iron ore, copper and coking coal. BHP sold iron ore at $58 per ton this year compared to $44 the previous year. Production costs for iron ore also fell 3% from the prior year to $14.6 per ton, contributing to profit.
The mining conglomerate is also "actively pursuing options" to exit the shale gas business in the U.S., CEO Andrew Mackenzie said on a media call Tuesday, calling such assets "noncore." BHP bought a shale gas development company in 2011, but a supply glut has depressed prices. Mackenzie added that the company will be patient with its withdrawal.
The decision to unload shale gas operations has been well-received by the market. American activist investor Elliot Associates had been urging BHP to sell its U.S. shale assets.
BHP will also delay a decision to invest in its potash business that was to be announced in June until sometime after 2018. The company is currently building extraction equipment for its potash mines in Canada and is looking for a partner to help raise a large sum of money for development investment.