China-Australia relations: Australian miner BHP ‘not banking on’ coal ban to be lifted any time soon

BHP acknowledged that its coal business, which is under review for sale or spin off, has taken a hit due to a trade spat between Australia and China

On Tuesday, BHP reported its best first-half profit in seven years and declared a record interim dividend, partly due to China’s strong appetite for iron ore

Reading Time:2 minutes

China’s reliance on commodity-intensive stimulus measures to sustain economic growth has sent prices of the steel making ingredient to multi-year highs, while the coronavirus vaccination push has brightened outlook for global trade this year. Photo: Reuters

Published: 11:03am, 16 Feb 2021Updated: 11:04am, 16 Feb 2021

BHP Group expects China’s ban on imports of Australian coal to continue for some time, a policy that has dented the top global miner’s coal returns, chief executive Mike Henry said on Tuesday.

BHP acknowledged that its coal business, which is under review for sale or spin off, has taken a hit due to a trade spat between Australia and China that the miner does not expect to be resolved any time soon.

“We’re certainly not banking on any near term resetting of that policy,” Henry said.

On Tuesday, BHP reported its best first-half profit in seven years and declared a record interim dividend, as top metals user China’s strong appetite for iron ore to support its infrastructure push kept prices elevated.

China’s reliance on commodity-intensive stimulus measures to sustain economic growth has sent prices of the steel making ingredient to multi-year highs, while the coronavirus vaccination push has brightened outlook for global trade this year.

The world’s largest listed miner said in a statement it expects a continuation of strong Chinese demand in 2021, and recovery in the rest of the world’s global crude steel production.