Mining giant Rio Tinto will make deeper cost cuts and slash spending after plunging iron ore prices caused a massive fall in half year profit.
Earnings in its iron ore division more than halved in the six months to June, while coal and copper mining were also hit hard by price slides.
That contributed to an 82 per cent drop in net profit to $US806 million ($A1.10 billion), and excluding one-off items, underlying earnings dropped 43 per cent to $US2.9 billion ($A3.94 billion).
Morningstar equities analyst Mark Taylor said the result was stronger than expected, with better cost savings and impressive reductions in capital expenditure.
The company has lifted its cost cutting target to $US1 billion after already achieving the majority of the $US750 million cuts originally planned for 2015.
Capital expenditure is predicted to fall to $US5.5 billion in 2015 and less than $US6 billion in 2016, shaving off about $US1 billion in each year.
"Generally, they're impressive numbers in terms of bringing costs down," Mr Taylor told AAP.
Rio makes around 85 per cent of its profit from iron ore, and the steel making commodity's price hit 10 year lows in the first half of 2015.
Weaker commodity prices sliced a total of $US3.6 billion ($A4.89 billion) from Rio's underlying earnings in the six months.
Chief executive Sam Walsh said Rio still holds a positive view on the dominant Chinese steel market.
"The economic environment has been challenging, particularly for commodities," Mr Walsh told reporters.
"But the cyclical weakness will pass as the momentum of economic growth picks up and the commodity markets rebalance."
But a recovery would be characterised by slower commodity demand growth compared to the past decade, he said.
Mr Walsh also said western economies were recovering and Rio was sensing potential from emerging markets such as India and Indonesia.
Fat Prophets analyst David Lennox said Rio had performed well given the current commodities environment.
Capital expenditure was being cut by more than expected, an indication Rio would slow its development program, he said.
A rise in net debt to $US13.7 billion was "neither here nor there" given the size of the company, Mr Lennox said.
Shareholders will also receive an improved interim dividend, in line with analysts' expectations.
PLUNGING PRICES HIT RIO TINTO'S BOTTOM LINE
* Net profit down 82 pct to $US806m
* Underlying earnings down 43 pct to $US2.9b
* Interim dividend up 11.5 US cents to $US1.075 per share
BREAKDOWN OF RIO TINTO'S PERFORMANCE
* Iron ore profit down 55 pct to $US2.1b
* Aluminium profit more than doubled to $US793m
* Coal and copper profit down 40 pct to $US393m
* Diamonds and minerals profit down one pct to $US75m
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