(Repeats story published late Thursday; no changes to text)
* BHP reiterates commitment to progressive dividend
* Says Chinese buyers can raise credit to pay
* Company chairman says balance sheet is strong
By Atul Prakash
LONDON, Oct 22 (Reuters) - BHP Billiton BLT.L BHP.AX , the world's biggest miner, said on Thursday that it remained committed to its dividend policy and expected its balance sheet to stay strong.
BHP hiked its dividend despite reporting in late August a 52 percent slump in its underlying attributable profit to $6.42 billion for the year to June, below analysts' forecasts of around $7.73 billion.
"We will not risk the balance sheet ... At this point in time, our balance sheet is strong," BHP Chairman Jac Nasser told the annual shareholders' meeting in London. "That doesn't mean that over a short period of time dividend is not covered by borrowings."
He said the company had raised its full-year dividend by 2 percent in U.S. dollar terms to 124 cents per share, returning $6.6 billion to shareholders in the last 12 months.
Analysts said some miners were feeling the pressure and investors were getting jittery about BHP's ability to maintain the dividend, but BHP might stick to its dividend policy and instead further cut investments.
BHP and its peers hiked output of iron ore, copper and coal just as demand growth slowed in China, the top global metals consumer, and have been slashing costs over the past three years to cope. Its London-listed shares BLT.L have fallen about 14 percent so far this year.
Mining and commodities trader Glencore GLEN.L has suspended dividends in a bid to cut its net debt to $20 billion by the end of next year. ID:nL5N11D0KT
"Glencore has cut its dividend completely and it's likely that Anglo American AAL.L might also reduce its dividend. When investors see how high BHP's dividend yield is, they are obviously asking themselves if the dividend is secure," Tom Gidley-Kitchin, mining analyst at Charles Stanley, said.
BHP Billiton's Chief Executive Andrew Mackenzie told reporters after the meeting that the company had a choice of capital allocation between projects and the dividend.
"As things stand at the moment, we feel we can retain a solid balance sheet, pay the dividend and invest in everything we want," he said.
Mackenzie said that for its primary products, Chinese buyers had no difficulty in raising credit to pay.
He said weaker demand for iron ore and metallurgical coal in China had been partly offset by slower-than-expected growth in the scrap market.
BHP boosted its September quarter iron ore output by 7 percent and maintained its full-year guidance, shrugging off growing concerns of a global supply glut. Iron ore prices are down sharply from a high of nearly $200 a tonne in 2011 to about $51 .IO62-CNI=SI on Thursday. ID:nL3N12K5L1