BHP Billiton has flagged ongoing rationalisation of its coal operations, which will include further divestments as profitability is constrained by cost inflation and a decline in prices.

‘‘We will selectively pursue asset divestment opportunities with a firm focus on value,’’ BHP said this morning in a presentation for an analyst visit to its mines in Queensland. ‘‘Assets must earn their right to remain in the portfolio.’’

BHP shares were up 1 per cent at $34.30 this morning, outperforming the broader market and after the miner's New York-traded stock rose overnight.

BHP in February said it was looking to sell the Gregory steelmaking coal mine in Queensland, after last year closing one part of the operation due to low prices. The following month the company confirmed it’s planning to sell about 10 of its assets across its portfolio amid a rise in debt levels after a metal price boom driven by China stuttered.

‘‘We have taken decisive action to drive costs lower,’’ the miner said. ‘‘Our plan will deliver substantial growth in free cash flow.’’