Mining giant BHP has posted a bumper profit despite Australia's trade spat with China, global economic uncertainty and the need to transition to clean energy.
"BHP is in a strong position to manage its future in a time of rapid change," company chair Ken MacKenzie said in a statement to the Australian stock exchange on Tuesday.
Net profit has soared 42 per cent to $US11.3 billion, on a surge in revenue to $US60.8 billion in the 2020/21 financial year, after a stellar first-half bankrolled by record shipments of iron ore.
The miner is also banking on nickel and copper as "commodities which are favourably leveraged to the mega-trends of electrification and decarbonisation", BHP chief executive Mike Henry said.
BHP confirmed it would merge its oil and gas arms with Woodside's assets to create one of the world's largest energy companies.
"The combined company will have a high margin oil portfolio, long-life LNG assets, and the financial resilience to help supply the energy needed for global growth and development over the energy transition," BHP said.
Backed by both boards, the merger is expected to be completed by June 2022.
The miner will also simplify its corporate footprint by restructuring around the Australian parent company.
BHP also announced a $US5.7 billion investment in the Jansen potash project in the province of Saskatchewan, Canada, which is expected to operate for 100 years.
A record final dividend of $US2 a share means BHP has returned more than $US15 billion to its shareholders over the past year.
A surge in global infrastructure spending has helped to drive demand for steel made from iron ore, on stimulus packages delivered last year by major economies including China.
BHP expects China's restrictions on Australian coal to last for years, and is already selling thermal coal assets.
Iron ore prices have fallen from heady highs above $200 a tonne, but remain well above longer-term averages around $60-70 a tonne.
Any future Chinese ban on Australian iron ore could drive prices higher, Australia's commodity forecaster says, likely softening the landing for prices in the current financial year.
