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Miners report sharp increase in profits

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21st Feb 17 9:50 am

How did it happen?

BHP Billiton and Anglo American, two of the worldโ€™s biggest mining companies have seen a sharp increase in profits partly due to the rise in commodity prices.

BHPโ€™s half-year profits sat at $3.24bn (ยฃ2.6bn), this is up from $412m a year earlier.

Anglo American reported full-year profits of $1.6bn, this is compared with a $5.6bn which it saw in 2015.

The price of some commodities has risen, this is in part due to increased demand from China. Iron ore has risen by 80 per cent whilst coal is up by a massive 300 per cent.

Chief executive Andrew MacKenzie, spoke of another factor which helped, he told the BBC: โ€œChinaโ€™s improved a little bit but I would say much of whatโ€™s going on in terms of the iron ore price is down to less production of iron ore elsewhere and companies like us have been able to fill that gap.โ€

โ€œThe Chinese economy is going quite strongly at the moment, partly down to stimulus that was stated probably about three quarters back, and that has really pushed up the premia for high quality iron ore and metallurgical coal and theyโ€™re our principle products.โ€

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