Canadian Mining Journal


BHP slashes dividend 75%, braces for prolonged downturn

It was the last, biggest and most vocal defender in the mining industry of maintaining the status quo with respect to its generous dividend policy, but BHP Billiton has finally succumbed to industry-wide trends and deeply cut its dividend, and formulated a more humble dividend policy going forward.

It’s the abandonment of a controversial dividend policy that promised a continual increase or at least a maintenance of dividend payments – a “progressive” policy that led to chimerical dividend yields of 12% and more in the first weeks of 2016, after having spent years below 4% before September 2014.

The world’s biggest mining company, like its smaller peers, has been hit by shrinking revenues and profits in the face of the four-year downturn in metal and coal markets, as well as a more precipitous decline in its substantial oil and gas business due to the collapse in crude oil prices.

In its next interim dividend, BHP will pay US16¢ per share, which is covered by free cash flow.

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