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Soaring coal prices propelled BHP to its greatest profit in 11 years.

(Reuters) -BHP Group Ltd reported record profits on Tuesday, boosted by higher coal and other commodity prices, and declined to rule out a relaunch of its failed $6 billion bid for OZ Minerals.

Shares in the world’s biggest miner by market value rose 5.5% after a greater-than-expected 26% rise in earnings to $21.3 billion for the year ended June 30—its highest since 2011—and the announcement of a record dividend.

Read More : Coal’s return threatens European ESG ratings.

Flushed with finances and more flexible after merging its London and Sydney public holdings, BHP is back searching for acquisitions and on Aug. 8 offered to buy copper and nickel miner OZ Minerals in a A$8.34 billion ($5.8 billion) transaction-its second takeover attempt in a year. The offer was declined.

“We have numerous levers for growth and M&A is only one of those levers … we will remain prudent,” said BHP Chief Executive Officer Mike Henry in an earnings briefing.

Henry did not comment on whether BHP would return to OZ Minerals with a new offer. Shares in OZ Minerals were up 1.2% at 0230 GMT while the Sydney benchmark was up 0.5%.

“It’s good to have but not a must-have,” Henry stated, referring to OZ Minerals. “It’s really disheartening that the board (of OZ Minerals) chose not to engage.”

Read More : Sources say that India’s Tata Steel bought 75,000 tonnes of coal from Russia in May.

The rise in underlying profit from continuing operations was more than Vuma Financial’s estimate of $20.89 billion, which was based on what most people thought would happen.

Profits were boosted by its coal sector, with prices hitting record levels after Russia’s invasion of Ukraine. BHP said the results reflected higher coal and copper prices, and tight cost reductions.

DESIRE TO EXPAND

Since hitting a high in March, copper prices have dropped by 25% because of a slowing economy in China, which is a big customer, and aggressive interest rate hikes that threaten a global recession.

The bid for OZ Minerals, together with the merger of its petroleum company in June, suggests BHP has extra cash flow and is trying to expand, said Azeem Sheriff, a market analyst at CMC Markets.

“The copper and energy markets are incredibly favourable for the company and that’s been pouring through in step-forward guidance as well,” Sheriff said.

Read More : Records show that food prices dropped in February, too.

RBC analysts wrote in a note: “BHP maintained $4bn of cash despite closing with net debt of $300m, signalling to us that the balance sheet remains ready for potential M&A.”

For the fiscal year that ended on June 30, shareholders will get a final dividend of $1.75 per share, for a peak annual distribution of $3.25 per share, at a time when other miners have cut investor returns to deal with falling profits.

The miner said it will assess options to expand production at its top iron ore producing unit to 330 million tonnes a year, and continue to explore growth options in “future-facing” commodities like copper and nickel.

BHP warned of a slowdown in advanced economies as monetary policy tightens, and said it expects labour constraints to continue to put pressure on global and local supply chains.

Read More : Young, low-income Americans struggle with inflation.

Henry, however, said he was optimistic about China and that its return from COVID-19 lockdowns should boost demand for resources. “We think that China will become a stable source of demand for commodities in the coming year as policy support takes hold,” he said.

Rival miner Rio Tinto (NYSE:RIO) reported a 29% drop in first-half profit and more than halved its dividend in July, citing softening demand from China and supply-chain snags.

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