20 August 2008 | Paul Snell
Mining firm BHP Billiton has announced record financial results thanks to the recent commodity boom.
The company, who supplied the medals for the Beijing Olympics, recorded a profit of $15.4 billion (£8.3 billion) last year, a rise of 12.4 per cent compared with the year before. It said increased production had allowed the firm to capitalise on the rising cost of its commodities.
But the firm added it had suffered cost rises equivalent to $1.18 billion (£637 million) over the course of the year. The firm said the rising cost of explosives, coke and fuel had been significant, but strong supplier relationships had helped the group mitigate these.
The increased price of fuel, energy and raw materials cost the group $575 million (£309.8 million). Higher logistics and contractor charges also affected the firm, but it still managed to achieve $225 million (£121.2 million) of cost reduction.
Experts have warned of a lack of resources that face mining firms in the future (News, 3 July), and BHP said the mining industry has not moved quickly enough to support the increased demand for the world's commodities. But it expected demand to remain strong and high commodity prices would continue as long as there was a supply shortage.