Whiplash. BHP boss Mike Henry has a simple point to make about nickel. On Tuesday, he was at pains to stress that mining and processing the metal is "far and away the smallest business" in the $153 billion company. That's true. But it also helped wipe out 86% of the excavator's earnings for the six months to the end of December.

The near-50% drop over the past year in the price of one of the key ingredients for electric-vehicle batteries sent EBITDA at BHP's Western Australia Nickel unit almost $200 million into the red. It was not a big money-spinner to begin with, contributing just $100 million of BHP's $13.2 billion of EBITDA in the second half of 2022.

Yet revenue and earnings are not the only metrics that count. The nickel market rout prompted the company to lop $2.5 billion after tax off the value it ascribes to the division. Another $3.2 billion came off the bottom line to bolster provisions to cover legal and other costs stemming from the tailings dam disaster nine years ago at its Samarco mine, jointly owned with Vale.

Earnings would have looked even worse were it not for the surprisingly robust iron ore price in the second half of the year. That helped EBITDA grow 5% compared with the latter half of 2022 and allowed Henry and his fellow board members to pay out 56% of underlying earnings in dividends, lower than the previous two six-month periods but a tad more than analysts were expecting.

The charges, though, are a reminder to shareholders that the industry's fortunes aren't limited to, say, Chinese demand. Boom-and-bust commodity cycles and environmental costs remain outsized hazards.

(Corrects dividend payout ratio in paragraph 4 to 56%.)