SYDNEY: Australian mining giant BHP reported a sizeable hit to net profit Tuesday and warned of “volatility” ahead in global commodity markets buffeted by China’s economy. Revenue climbed three percent to US$55.7 billion in the financial year to June 30, it said, citing record deliveries and rising prices for iron ore.

But net profit slumped 39 percent to $7.9 billion, trimmed by the multi-billion costs related to a 2015 Brazilian dam collapse and the temporary suspension of nickel mining operations in Western Australia due to a glut in the market, it said. BHP chief executive Mike Henry said the company had nevertheless delivered a “strong” set of results, with underlying profit — a measure that strips away non-recurring costs — up two percent to $13.7 billion.

“In the near term, we expect volatility in global commodity markets, with China experiencing an uneven recovery among its end-use sectors,” he said. China is a major consumer of Australian commodities, notably of Australia’s biggest export earner, iron ore.

Australia’s government warned this month, however, that the “softness” of China’s economy and tumbling iron ore prices could hurt the nation’s budget. BHP’s boss said the group had a “pipeline” of copper projects under development in Chile and Australia after its copper plans suffered a setback this year. In May, BHP said it had walked away from a proposed $49 billion takeover of British rival Anglo American that would have created a global copper titan. — AFP