THE world's biggest mining firm, BHP Billiton, yesterday said China's voracious appetite for raw materials had helped fuel a seventh successive year of record profits.

The Australian company said China remained a "key driver" of global commodity consumption amid strong demand from other emerging economies. This has fuelled higher prices across most of its major commodities and BHP expects prices "high relative to historic levels" going forward.

Underlying profits rose 12% to pounds 8.2bn in the year to June 30. The company is currently engaged in a hostile pounds 80.3bn takeover tilt at rival Rio Tinto.

BHP expects global growth to slow as developed economies suffer in the months ahead, but said emerging markets would be buoyed by domestic investment and regional trade. "The effects of current weaknesses in the developed economies on demand for our commodities should be minimal driven by ongoing strong demand from the emerging economies," the firm added.

BHP's profits boost came despite the firm dealing with an extra pounds 632m in costs, due to factors such as higher fuel and energy prices, labour shipping and freight costs.

Shares in the firm rose more than 2% as the group also said it had broken production records for seven of its products including petroleum, copper and iron ore. This - along with stronger average prices for most of its metals - helped the miner to a 16% increase in underlying earnings from its base metals operation even after the higher costs.

"Strong volume growth has allowed us to capture the benefits of very high prices," the group added.

The group, which is listed in London and Australia, has around 39,000 staff and 100 operations in 25 countries. The company is investing almost pounds 13.4bn on a further 28 projects worldwide. BHP's chief executive Marius Kloppers said his proposed takeover of Rio Tinto made "more sense than ever".

"While there are enough resources to satisfy the world's appetite, the industry has not moved quickly enough to meet the growth in demand," the firm added.

BHP has said there is a "compelling rationale" for the deal but Rio Tinto's board unanimously rejected the approach as significantly undervaluing the business.

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