Diversified mining firm BHP has registered a 32% slump in underlying attributable profit for the half-year ended 31 December 2022, due to a decline in iron ore and copper prices.

The slowdown in China demand amid its zero-Covid-19 policy dampened performance over the past year, though the firm projects growth in the coming months as curbs are lifted.

It is also positive on India, stating that growth in this market and in China will balance the slowdown in Europe, Japan, and the US.

BHP’s half-yearly underlying profit attributable from continuing operations stood at $6.6bn, versus $9.71bn in the same period a year ago.

Revenue from continuing operations dropped 16% to $25.7bn from $30.5bn.

Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) slid 28% from $18.46bn to $13.23bn.

Net debt for the half-year ended 31 December 2022 was $6.91bn.

The firm also announced an interim dividend of 90 cents per share, down from $1.50 a year ago.

BHP CEO Mike Henry: “Significant wet weather in our coal assets impacted production and unit costs, as did challenges in securing sufficient labour. Inventory movements during the half contributed to costs, including the planned draw-down at Olympic Dam after inventory built up during the smelter refurbishment last year.

“We expect these factors to abate in the second half and for unit costs to fall, in line with revised guidance.”

The miner said it expects a ‘markedly higher’ price than prior to the Covid-19 pandemic floors for some commodities, due to an increasing marginal cost of mining production.

Besides, it took a $1bn inflation hit, mainly from diesel costs, for the half year.

In a statement, it said: “The lag effect of inflation and continued labour market tightness is expected to impact our cost base into the 2024 financial year.”

To focus its coal portfolio on the highest quality metallurgical coals, the BMA 50:50 joint venture between BHP and Mitsubishi Development is looking to divest the Daunia and Blackwater mines in Queensland.

The move follows detailed considerations of BMA’s longer-term plans.

BHP said in a press statement: “Whilst high-quality assets with growth potential, the Daunia and Blackwater mines would struggle to compete for capital under our capital allocation framework, including given our choices for deploying capital globally, and we are seeking to divest these assets to an operator who is more likely to prioritise the necessary investments for continued successful operation. We will look to maximise the value of these assets via trade sale.”