MercoPress. South Atlantic News Agency

Mining giant BHP Billiton half year profits fall 25%

Global mining giant BHP Billiton, which also has interests in the Falkland Islands oil industry, has seen its half-year profits fall by a quarter, saying it had been hit by “a rapid deterioration in market conditions”.

The Anglo-Australian firm made a pre-tax profit of 6.9 billion USD in the six months to 31 December, down 25% from 9.1 billion a year earlier. BHP said it was also affected by one-off costs, including the abandonment of its bid interest in rival Rio Tinto. Global metal demand and prices have slumped as the economy has worsened. In October 2007 BHP Billiton acquired an interest in 14 exploration and production licenses offshore the Falkland Islands in the South Atlantic. The Company signed contracts with Falkland Oil and Gas Limited (FOGL) for rights to explore and, if successful, eventually produce oil and gas from the East Falkland Basin located off the southern and eastern coast of the Falkland Islands. According to a release at the time BHP Billiton holds a 40% interest in the acreage and is the designated operator. Falkland Oil and Gas Limited hold the remaining 60% interest. The production licenses cover approximately 18 million acres and are located in water depths ranging from approximately 200 to 2,000 meters. BHP half-year revenues totalled 30 billion, down 17% from the year before. The company said its latest results "represented a robust operating and financial performance achieved in an environment that deteriorated significantly during the period". BHP announced last month that it plans to cut about 6,000 jobs worldwide to cope with falling demand for its products. The firm abandoned takeover interest in its fellow Anglo-Australian rival Rio Tinto in November of last year, blaming the fall in global metal prices. "Given market conditions and the potential for a worse outcome, the results are pretty positive," said Peter Chilton, analyst at Constellation Capital Management.