Miners report sharp increase in profits

How did it happen?

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

BHP’s half-year profits sat at $3.24bn (£2.6bn), 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: “China’s improved a little bit but I would say much of what’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.”

“The 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 they’re our principle products.”