Mining giant BHP is selling two Queensland coal mines as higher royalties bite and aims to recoup costs in NSW after government intervention in energy markets.
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BHP is seeking buyers for the Blackwater and Daunia metallurgical coal mines as the significant shift in state royalties "increases our risk and worsens the economics of these mines", chief executive Mike Henry said on Tuesday.
He said BHP would also pursue the NSW government to recoup the cost of thermal coal production for domestic users from the Mt Arthur mine after the state reserved supplies for power generation.
"The intervention is going to cost money," Mr Henry said during a conference call.
BHP hadn't changed its overall outlook on demand for metallurgical coal, used for making steel, but was consolidating its portfolio to retain the highest quality assets, he said.
Union boss Stephen Smyth said BHP had made a fortune out of central Queensland coal assets and should not cut and run, leaving workers and communities with an uncertain future.
"BHP must guarantee that workers' entitlements will be protected throughout this process, including their contractor workforce," Mr Smyth said.
Elsewhere, BHP is growing iron ore production from record levels in the Pilbara and expanding in copper, uranium and nickel with the acquisition of OZ Minerals on track for early May.
Mr Henry welcomed Australia's improved trade relationship with China and signs of growth but declined to say whether BHP had resumed coal shipments, after finding other buyers during the export ban.
"We've been buoyed by the green shoots that we've seen since the start of this calendar year," he said.
"There's a lot there that's giving us confidence that we'll see an acceleration in Chinese demand."
The miner reported an underlying attributable profit slumped by almost a third to $US6.6 billion ($A9.6 billion) for the six months to December 31, missing market expectations.
BHP shares fell 1.8 per cent or 86 cents to $A47.60 in afternoon trade.
Profit from operations in the half fell more than a quarter (27 per cent) to $US10.8b ($A15.6b) on lower prices for iron ore, bad weather hitting coal production and higher royalties paid on coal in Queensland and inflation.
But this was offset by record iron ore production and higher prices for coal and nickel.
"BHP's pending acquisition of OZ Minerals will be critical to future growth with the focus towards copper and nickel, two commodities that are a focal point in Australia's clean energy transition," analyst Josh Gilbert said.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) was $US13.2b ($A19.1b), down 28 per cent.
Net operating cash flow was $US6.8b ($A9.8b), down 41 per cent.
But BHP was positive about the demand outlook in the second half of FY23 and into FY24, with China offsetting weakness in Europe and the United States.
In Western Australia, BHP is planning to lift iron ore production to 330 million tonnes per year as the world's lowest cost major iron ore producer.
BHP reported it was on track to meet its 2030 target on greenhouse emissions.
Capital expenditure on operational decarbonisation is expected to be around $US4b ($A5.8b) up to the 2030 financial year, BHP said.
BHP slashed its interim dividend to US 90 cents a share.
Australian Associated Press
