BHP Billiton said on Tuesday it swung back to profit in the six months to December 31 and rewarded investors by announcing a higher than expected interim dividend.

The world’s largest miner by market capitalisation reported a net profit of $3.2bn in the first half of its 2017 financial year compared to a loss of $5.7bn a year earlier.

BHP booked an underlying profit of $3.2bn for the December half, up from $412m a year ago. The improved results reflect a resurgence in commodity prices and the company’s recovery following write offs linked to its expansion into shale oil and gas and a fatal accident at a joint venture in Brazil.

Andrew Mackenzie, BHP chief executive, said the “strong result” reflected several years of productivity improvements and a redesign of the company’s operating model.

“Our steadfast commitment to this plan has positioned us to take full advantage in a period of higher prices,” he said.

BHP said it is paying a 40 US cents per share interim dividend, which was above analyst expectations. This follows Rio Tinto’s decision earlier this month to hike dividends and announce a $500m share buyback.

The miner also announced plans to repurchase $2.5bn from five dollar-denominated bonds maturing between 2018 and 2023.

The increased returns for shareholders follow a spike in commodity prices, which boosted BHP’s underlying EBITDA to $9.9bn, up from $6.0bn in the same period a a year ago
The price of iron ore, which makes up about half of BHP’s profits, is testing two year highs above $90 – double the price 12 months earlier.

Shares closed 1 per cent in Sydney ahead of the announcement.

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