* Share price falls more than 2 percent
* Elliott Advisors declines comment
* Profit down 37 percent if one-time items included (Updates with detail from news conference, shareholder comment, share price)
By Melanie Burton and Barbara Lewis
MELBOURNE/LONDON, Aug 21 (Reuters) - Concerns about rising costs and the impact of trade tensions between the United States and China weighed on shares of leading miner BHP BHP.AX BLT.L on Tuesday after a 33 percent jump in annual underlying profit still missed forecasts.
But the miner paid a record final dividend and said it expected to hand more money to shareholders on completion of a sale of U.S. shale assets to oil major BP . BP.L
Other miners, which have recovered from the commodity price crash of 2015-16, have also been returning money to shareholders, under pressure not to repeat the reckless purchases of the commodity boom, and because of the difficulty of finding suitable opportunities for growth. miners are at the same time struggling to make themselves an attractive prospect to investors concerned about sustainability and climate change.
In 2017, BHP came under pressure for change from activist investor Elliott Advisors, which listed a series of demands to raise shareholder returns, including selling unprofitable shale assets. Elliott on Tuesday declined to comment. BHP said it planned to meet the investor this week.
BHP, which has said it was seeking reform of its own accord, in July announced BP would buy U.S. shale oil and gas assets from it for $10.5 billion. miner said it would decide how to return profits from the sale to investors once the deal was finalised.
Portfolio manager Andy Forster of Argo Investments in Melbourne said the dividend was stronger than he had expected, but the cut in productivity gains forecast in the 2019 fiscal year - to $1 billion from a previously promised $2 billion - "slightly took the gloss off the results".
Alasdair McKinnon, fund manager of the Scottish Investment Trust, which is a shareholder in BHP, said the results were solid.
"Miners like BHP have climbed remarkably from the dark hole they found themselves in just a couple of years ago," he said in an emailed comment.
BHP's share price in London fell more than 2 percent by 1432 GMT, while the broader mining index was down nearly 1 percent. .FTNMX1770
'A LITTLE MORE APPREHENSIVE'
BHP Chief Executive Andrew Mackenzie said the company was "a little more apprehensive" on the short-term outlook, given trade relations between China and the United States.
Escalating tensions between China, the biggest commodity consumer, and the U.S. have rattled metals markets and raised the prospect of reduced Chinese demand. Copper prices on the London Metal Exchange CMCU3 have fallen around 18 percent from a four-year high touched on June 7.
Arnoud Balhuizen, BHP president of marketing and supply, told Reuters in an interview the copper market arguably had been more driven by sentiment than by any direct trade impact and he had seen no difference in customer demand.
For the year ended June 30, underlying profit, which excludes one-time gains and losses, rose to $8.93 billion from $6.73 billion, supported by higher output and higher prices, just below an estimate of $9.27 billion according to 15 analysts polled by Thomson Reuters I/B/E/S.
BHP paid a record final dividend of $0.63 a share, up from $0.43 a year ago, on the back of free cashflow of $12.5 billion.
Including one-off charges, BHP's profit fell 37 percent to $3.71 billion.
BHP on Tuesday announced a $650 million charge for a failure at the Samarco dam, operated jointly by BHP and Vale VALE3.SA . The dam collapse in 2015 killed 19 people in Brazil's worst environmental disaster. also announced a $2.8 billion post-tax charge from the sale of the U.S. shale oil and gas assets.
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