SYDNEY—As ships with its coal remain stranded at sea because of a diplomatic dispute between Australia and China, BHP Group Ltd. showed another side of the trade relationship with its best underlying profit in seven years as it rode a rally in iron-ore prices.
BHP reported a $6.04 billion profit before exceptional items for the six months through December, up 16% compared with a year ago, as China’s big bet on infrastructure spending to drive its economic recovery from the coronavirus pandemic stoked demand for iron ore.
The company also declared a record half-year dividend of $1.01 a share. Prices of iron ore, used to make steel, recently surged to a nine-year high of $176.90 a metric ton.
That is well above the cost of roughly $10 to $20 a ton that most global miners incur in digging the commodity out of the ground.
For BHP, the higher price for iron ore, as well as for copper, helped to offset lower prices for crude oil and steelmaking coal. During the half-year period, BHP’s average realized price of iron ore jumped 33% year over year, and copper was up 28%.
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