Anglo-Australian mining giant BHP Billiton has posted a stunning record net profit of almost $10.5 billion on the back of booming demand from China and high commodity prices.

That is a profit jump of more than 60 percent from the previous year.

The company, which is the world's biggest mining company and is dual listed in Australia and London, also announced a $3 billion share buyback program.

BHP said Wednesday that rising copper and iron ore prices lifted net income for the year ended June 30 by 63 percent to $10.45 billion, compared with $6.39 billion a year earlier.

Revenue rose 25 percent to just under $40 billion.

The company, which has a market worth of about $75 billion, announced its results after the market closed in Australia. Its shares have made a gain of about 26 percent so far this year. They reached a high of A$31.97 on May 10 this year.

BHP said it achieved record production volumes for aluminium, copper, iron ore, nickel and natural gas in "a strong demand environment."

In Asia, it said growth was dominated by China's continuing industrialization and urbanization, along with continued economic expansion in Japan. Economic activity in Europe also gained momentum.

The global outlook was positive, it said, with China's growth expected to stay strong even if efforts to cool its economy were successful.

BHP said it also had 23 growth projects in the pipeline, representing an investment value of almost $14 billion.
Share buyback

CEO Chip Goodyear said BHP would return another $3.0 billion to shareholders over the next 18 months through a series of share buybacks.

He said it was yet to be decided the extent to which these would be on or off market.

"We expect this will commence with an on-market buyback in BHP Billiton Plc."

Goodyear said the program follows the $2.0 billion capital management program completed in May, under which 1.9 percent of the issued share capital of the group was repurchased.

He said that at the conclusion of the latest buyback, BHP will have returned $15.5 billion to shareholders through capital initiatives and dividends since June 2001.

One issue for BHP is the continuing strike at the Escondida open-pit copper mine in Chile, where workers have been pushing for higher wages and bonuses (Full story).

The miners have been on strike since August 7. BHP is the majority owner of Escondida with 57.5 percent, while Rio Tinto has a 30 percent stake.

Escondida is the world's biggest copper mine, producing 8 percent of global output, with daily production worth about $25 million. It made a profit of $2.9 billion in the first half of 2006.

Asia-based investment adviser Marshall Mays told CNN on Wednesday that BHP was trying to move its focus away from broad commodities to higher-value metals such as copper and nickel, and also uranium.

Copper has been trading this week at around $7,800 a tonne, down from a record high of $8,800 a tonne in May. Nickel reached a record $29,200 a tonne earlier this month.

Mays, Director of Emerging Alpha Advisors, said the strike at Escondida was a "screwdriver in the wheel" for BHP.

The company was forced to declare force majeure on shipments of copper concentrates after the strike began on August 7.

BHP operates seven major production divisions: petroleum; carbon steel materials; stainless steel materials; aluminium; base metals; diamonds and specialty products; and energy coal.

The main contributors to profit are petroleum, carbon steel and base metals.