He also applauded BHP chief executive Marius Kloppers and his team, "who have articulated the company's intent clearly, which is to be aggressive on growth, to fast track projects in its own backyard and to be alert to take advantage of opportunities that are presented by market pricing of commodities"

Argus said the interim results of the company also reflected quality outcomes from the diversified nature of its world-class assets.

Attributable profit after tax came in at $US6.1 billion ($A6.6 billion).

"Our balance sheet is geared at 15 per cent, and given the continued uncertainty surrounding world financial markets, we consider this prudent at this point in time," he said.

"We have maintained our progressive half-year dividend of US42 cents per share when others have faltered.

"We remain committed to increasing our capital expenditure and next year we plan to spend around $20 billion, which includes a $5.8 billion equalisation payment for the Western Australian iron ore production joint venture with Rio Tinto which we believe we can finalise this calendar year."

However, he said the company remained cautious about the state of the global economy and noted the recent International Monetary Fund (IMF) report which highlighted the gap in growth between developed and developing economies.

The IMF report predicts that between 2007 and 2011 the output from advanced economies will grow by just 1.9% while the developing countries will be 22.1%.

"We are very mindful that most countries have difficult decisions to make regarding a wind back of stimulus packages, against the backdrop of financial services sector reform, and how they boost economic growth," Argus said.

"It is imperative that the impact of any policy and tax changes of governments around the world on sectors of economies should be well understood and not hinder investment and the capacity of economies to grow.

"Ultimately, policies which reduce free cash flow available from profits generated after paying tax could affect a company's capacity to pay future dividends to shareholders."

Jac Nesser will become the new BHP chairman on March 30.

Argus' speech followed an announcement by the Australian Taxation Office that it was still considering whether to launch a fresh appeal against the major after losing the latest round in its long-running $A2.2 billion tax dispute with the company.

The full Federal Court on Wednesday dismissed the ATO's appeal against last April's decision in favour of BHP on a dispute relating to the tax treatment of bad debts and depreciation at the miner's failed hot briquetted iron plant in Western Australia and mineral sands operations in that state and in New South Wales.

 

Shares in BHP were down slightly in morning trade to $A43.24.