BHP’s outlook, record dividend fuel supercycle talk – by Cecilia Jamasmie ( – February 16, 2021)

BHP (ASX, LON, NYSE: BHP) reinforced talks of a new supercycle on Tuesday by rewarding investors with a record $5.1 billion first-half dividend and forecasting a “very constructive” outlook for the commodities market fundamentals, as the global economy begins to rebound from covid-19.

The world’s largest miner said first-half profit jumped by 16%, hitting a seven-year high, as demand from top metals consumer China helped boosting iron ore prices by 70% in 2020, to a recent nine-year high of $176.90 a tonne.

That is well above the cost of roughly $10 to $20 a tonne most global miners spend in extracting the steel-making commodity, according to estimations.

Iron ore takes the lion’s share of BHP’s earnings and the group said in January its realized ore price for the December half had jumped by 33% compared to the same period the previous year.

As most top miners, BHP is choosing to return cash to investors rather than spending it on risky new projects or takeovers.

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