While strong commodity markets pushed BHP Billiton’s earnings to record levels in the financial year to June 30, the world’s largest diversified mining group said yesterday that the commodity bull-run is making acquisitions difficult.

CEO Chip Goodyear told a conference call that attributable profit (before exceptional items) increased by 82,8%, while attributable profit (after exceptional items) was 77,7% higher than last year’s results, and production records were set at many operations across the group.

However, Goodyear commented that the current pricing environment is making it difficult to make acquisitions at discounted prices, and has also spurred competition for any potential transactions.

“We are always looking for opportunities, which will appear from time to time. BHP Billiton will remain opportunistic,” he explained, adding that, currently, the group does not have its eye on a specific target, but is looking at “a lot of things”.

Despite being on the lookout for low-cost, long-life investment opportunities, Goodyear also indicated that the group would focus on organic growth to meet increased market demand. Various global market factors suggest that commodity prices could be sustained at higher levels than experienced in recent years.

Goodyear added, however, that there is no specific growth emphasis within the group in terms of a particular commodity, based on current strong prices.

“Our investment decisions are not based on today’s prices. We are running a long-term business and have long-term price protocols,” he said.

BHP Billiton also said yesterday that stronger commodity prices would, in turn, act as an inducement to new supply, which should bring supply and demand fundamentals back towards balance over the medium term.

The group is well placed to exercise the growth options within its portfolio and increase production capacity for many commodities currently in short supply.

“Many of these expansions can be brought to market quickly and at low cost, and will be profitable not only in today’s strong demand environment, but throughout the economic cycle. This is a key competitive advantage,” Goodyear stated.

“BHP Billiton’s combination of strong, stable cash flow and extensive organic growth opportunities ensure that we will be able to take full advantage of continued global economic growth and any sustained demand for raw materials. We will also continue to look opportunistically at acquisitions where these fit our business strategy and add value to the BHP Billiton group.”

Commenting on projects in the pipeline, Goodyear said seven projects reached the commissioning stage during the period under review. With costing yet to be finalised on some of those projects, total capital expenditure throughout the development phase of these was approximately $1,857-billion, which is $80 million, or 4,1%, below budget.

In total, the group currently has 14 major growth projects under development, 12 of which are tracking within board-approved budget and schedule.