The world’s largest mining company, BHP Billiton, unveiled a record $15.4 billion profit this morning, fuelled by high commodity prices and continued strong demand from China.

BHP launched a hostile $123 billion (£66 billion) takeover bid for rival Rio Tinto in February which, if it succeeds, would be the world’s second largest takeover.

Chief executive Marius Kloppers said the deal remained on track and now made “more sense than ever”.

Net profit for the year to June 30 was up 12 per cent from $13.4 billion the previous year.

BHP said record earnings had been achieved in its iron ore, manganese and base metals divisions.

Underlying earnings from iron ore alone were up 70 per cent to $4.6 billion, driven by soaring prices and increased sales volumes.

BHP said an eighth consecutive production record had been set at its Western Australian iron ore operation.

High commodity prices also helped lift the group’s oil and coal units to record earnings, which helped to offset a weaker performance from its aluminium and steel businesses.

Earnings from stainless steel fell by 65 per cent to $1.3 billion because of weaker nickel prices, the adverse impact of a strengthening Australian dollar and higher costs for fuel, energy and labour.

The European Union is preparing to give its anti-competition ruling on the proposed deal on December 9. Rio has dismissed the offer as too low.

BHP Billiton also struck an optimistic note about prospects for the global economy, which it said remained resilient in the face of “significant structural weakness” in developed economies.

The company said that the continuing massive industrialisation of China is providing “solid support” and that, despite a short-term slowdown, it expected long-term growth to remain robust.

BHP also warned of rising costs for fuel, labour and equipment.

“Strong global demand for resources continues to provide cost challenges for the whole industry. This is mainly due to rising prices for inputs such as diesel, (steel-making) coke and explosives, and shortages of skilled labour,” it said.

Its shares rose 2 per cent or 33p to £15.62.

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