Record profits for BHP Billiton

Mining giant BHP Billiton has announced record annual profits for the seventh consecutive year on the back of surging commodity prices.

The Anglo-Australian firm saw profits rise by 12.4% to $15.4bn (£8.2bn) in the year to the end of June.

BHP predicted that demand for commodities would remain strong in the longer term, but said the global economy would slow in the near term.

The EU is currently probing BHP's $170bn bid for rival Rio Tinto.

A tie-up between BHP and Rio would create a firm with a third of the world's iron-ore market, which has raised fears that it would be too powerful.

Rio has fended off the hostile bid, saying the amount offered did not meet the value of its assets.

Demand maintained

Increased production of copper, iron ore, manganese ore and alloy and alumina all bolstered BHP's profits.

But BHP said that while higher prices for oil and other commodities had contributed to its results, surging energy, fuel and shipping costs had offset some of the gains.

Commodity prices have fallen in recent weeks, leading to speculation that demand for natural resources may be waning.

But BHP said that it was confident that this was not the case.

"China has been the main driver for demand and while there has been a bit of a slowdown, we're confident that it will continue to have high demand for decades to come." the firm's chief executive Marius Kloppers told the BBC.

More generally, the firm added that any fall in demand for commodities stemming from a slowdown in developed economies should be offset by "strong demand from the emerging economies".

Mr Kloppers added that the proposed takeover of Rio Tinto made "more sense than ever".

"While there are enough resources to satisfy the world's appetite, the industry has not moved quickly enough to meet the growth in demand," he said.

BHP employs about 39,000 staff and has about 100 operations in 25 countries. It is investing almost $25bn on a further 28 projects globally.