As it’s the world’s biggest mining company, it’s important for Canadians to pay close attention to what BHP Billiton has to say in its just-released annual results:

• 37.5% return on capital employed — full year attributable profit up 12.4% — final dividend of $0.41 up 51%.
• “The world is confronting supply constraints for energy and mineral resources. While there are enough resources to satisfy the world’s appetite, the industry has not moved quickly enough to meet the growth in demand.”
• “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, coke and explosives, and shortages of skilled labour.”
• “The global economy has remained resilient in the face of significant structural weaknesses in developed economies. The continuing massive industrialisation in China is providing solid support to the global economy.”
• “Emerging market economies have contributed more than their industrial counterparts to global growth since the year 2000.”
• “In particular, China remains a key driver of global commodity consumption through its position as a net importer of raw materials.”
• “We continue to expect that commodity prices will be driven by long-run marginal cost of supply.”
• “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. Meanwhile, supply side pressures remain high. This has led to overestimation of the supply side response, and thus, price outcomes regularly being underestimated by industry observers. In the short-term, we expect prices to remain high relative to historical levels, albeit with higher volatility.”

Let’s hope they’re right about China’s ability to keep growing. Shanghai’s stock market closed down 5% last night at 2,320. It’s now down 60% from its peak 10 months ago. Hong Kong’s market is down a third.