Shareholders in the Anglo-Australian mining giant BHP Billiton have approved plans to hive off the group's steel division.

It will be called BHP Steel and will be floated as a separate company with a market value of about 2.5bn Australian dollars (�920m; $1.41bn).

"It will create a unique investment vehicle that is intended to produce a strong dividend yield," said BHP Billiton chief executive Paul Anderson.

The remainder of the world's biggest diversified mining group, which is believed to be worth about A$34.5bn, will focus solely on the exploration and exploitation of natural resources.

"This marks the final step in the creation of that focused, global resources company," Mr Anderson said.

Weak prices

BHP Billiton, which was formed in 2001 in a �20bn merger between BHP of Australia and Billiton of the UK, has suffered from falling profits.

In May, the group reported a 33% slump in profits during the December to February period.

The group reported a net profit of $406m, down from $604m a year earlier.

BHP Billiton blamed weak copper prices which pushed earnings from its base metals division down by more than half compared to the same period a year earlier.

The copper slump was only partially offset by higher silver output and the opening of a new zinc mine in Peru, the group said.

And the company expressed concern over the strength of the economic recovery, saying it had seen little evidence of an increase in demand.