Global mining market strong despite recent woes: Billiton
China and India will continue to buy minerals, buoying global markets despite recent signs to the contrary, said BHP Billiton on Monday as the mining giant released its year-end financial results.
The Australia-based company said that problems in key markets and the sputtering global economy are combining to present miners with economic pressures.
But "while short-term disruptions may occur, we expect that their long-term growth will remain robust as they continue on the path to industrialization" said the world's biggest mining company in its earnings news release.
Billiton, which posted operating earnings 21 per cent higher in its fiscal 2008 compared to 2007, has benefited from soaring prices for iron ore and petroleum, among other commodities.
One major reason for the higher prices is increased demand from emerging economic giants China and India.
In recent months, however, mineral prices have slipped, partially spurred by slowing world economic growth and partially from concerns that analysts have overestimated the demand from these countries, especially China.
Billiton argued that these developing economies will continue to expand and grow regardless of any short-term slowing.
Thus, "looking to the longer run, demand for our commodities will remain strong," the company said.
Overall, Billiton earned $15.96 billion US, a company record, for the year ended June 30, 2008. That represented a rise of 18 per cent versus earnings for its last fiscal year.
Three month stock chart for BHP BillitonThe company made $2.75 per share in 2008 compared to a profit of $2.30 for the same period last year.
Billiton, which emphasized its earnings before interest, taxes, depreciation and amortization (EBITDA), made $24.2 billion in 2008, according to this measure. That was an increase compared to operating earnings of $19.7 billion last year.
And higher commodity prices helped boost revenue from, for instance, manganese by 134 per cent and iron ore by 71 per cent in the year.
Overall, Billiton's annual revenue increased by 25 per cent to $59.5 billion.
Billiton is in the midst of a hostile $147-billion takeover bid for rival Rio Tinto Ltd., a move which would mean the two companies would control 40 per cent of China's iron ore market.
Earlier this month, the China Iron and Steel Association argued against the proposed merger, saying the corporate marriage would make it too easy for the new company to corner the world's steel market.
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