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WORLD BUSINESS

BHP piles up record $6.5bn profit

Asian demand for resources fuel profits

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A worker inspects iron ore at BHP Billiton in West Australia.

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SYDNEY, Australia (CNN) -- Anglo-Australian mining giant BHP Billiton has lifted net profit a staggering 85 percent to a record $6.51 billion on the back of booming Asian demand for iron ore, coal and petroleum.

The result was above market expectations of about $6.2-6.3 billion.

Revenue rose 27.5 percent to $31.8 billion, as the huge commodity price increases BHP won from Chinese and Japanese customers earlier this year translated into record sales.

While BHP said global economic growth rates had slowed from the "exceptionally high levels" seen in 2004, it remained bullish on China.

"We have not altered our view that China will remain a large and sustainable customer of raw materials and resources over the coming decades," it said in a statement Wednesday.

It said it welcomed the Chinese government's recent measures to tackle excessive growth rates in some sectors of the economy.

BHP is the world's largest diversified miner and added to its store of high quality resources projects through its $6.9 billion takeover of Australia's WMC Resources earlier this year. Along with nickel and copper, WMC's assets include uranium deposits.

That deal came into effect on June 3, so it had little impact on the company's 2004-05 result to June 30.

BHP, along with rivals Rio Tinto and Brazil's CVRD, won price rises of 72 percent from Asian and European iron ore customers in February and March as demand from China and India tightened supply around the world.

BHP said this year's record result reflected the benefits of commodity diversification.

It reported record production in 11 commodities, including iron ore, coking coal, natural gas, aluminum, nickel, silver and manganese ore and alloy. Volumes were up for energy coal and copper.

It brought eight new growth projects into production during the year, bringing to 24 the total number of major growth projects delivered in the past four years.

Last September, BHP announced it had struck a $3.2 billion deal to supply four Chinese steel companies with iron ore over the next 10 years from Western Australia.

The deal is for an extra 12 million tonnes a year of ore from the state's Pilbara region for the four mills, the Wuhan Iron and Steel (Group) Corp, Maanshan Iron and Steel, Jiangsu Shagang Group and Tangshan Iron and Steel.

In Australia, BHP Billiton shares closed Wednesday at A$20.56, down 2.4 percent. They have risen about 34 percent so far this year, compared with a rise of about 10 percent for the broader market.

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