MELBOURNE – BHP Billiton flagged on Wednesday that it sees no recovery in iron ore or coal prices in the next few years, while holding out hope for a rebound in copper and oil as it fights slumping earnings set to hit its long-protected dividend.
The top global miner reinforced the bleak outlook for most commodities in the near term, with markets slammed by oversupply as the economy slows in China, the world’s biggest metals consumer.
In a sign the company may cut its dividend, ending a long-held policy to maintain or raise its payout every year, BHP Chief Executive Andrew Mackenzie said in a quarterly production report that it was focused on defending its investment grade credit rating.
“In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term,” Mackenzie said.
He made no mention of any recovery in iron ore or coal prices.
BHP is reeling as oil prices have slumped further than expected at the same time as its other products have plunged to multi-year lows. Average prices for its commodities slumped between 20 and 51 percent in the first half of its financial year compared to a year earlier, with crude oil worst hit.
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