Mining giant BHP raises dividend after profit jumps 31%

The world's biggest mining company BHP Billiton has posted a 31% jump in profit due to improvements in its iron ore, coal and petroleum businesses.

Underlying first half profit was $7.8bn (£4.7bn), beating analyst forecasts for a $6.9bn profit.

The Melbourne-based company also increased its annual payment to shareholders by 3.5% and signalled that may rise further this year.

BHP shares rose by nearly 2% in Sydney trading after its earnings release.

The company also said it thought the global economy would recover further over the rest of this year.

"In the developed world, Europe experienced a period of relative stability while the United States economy accelerated, with continued improvement in private sector balance sheets a key supporting factor.

"The balance of risk to global growth is skewed to the upside, particularly given the broad based alignment of macroeconomic indicators in the major developed economies," BHP said in a statement.

Record output

BHP earns most of its money from the production of iron ore, which is used in the production of steel.

Profit from its iron ore business rose by 60%, and saw production from its Western Australia mines hit a record of 108 million tonnes.

The Anglo-Australian company's Queensland coal operations also saw output reach a record.

"Strong operating performance across BHP Billiton's diversified portfolio in the December 2013 half year delivered a 10 percent increase in production, with records achieved across three commodities and 10 operations," it said.

Last week its rival Rio Tinto raised its dividend by 15% after reporting higher profit following an aggressive cost-cutting program by its new chief executive Sam Walsh.