Rio Tinto and BHP H1 Profits Expected to Plunge

5 August 2009 (Last Updated August 5th, 2009 18:30)

BHP Billiton and Rio Tinto are set to report sharp falls in profit caused by the decline in metal prices and volumes due to the global financial crisis. Iron ore sales will play a key role in the first half earnings for both the companies, which are yet to finalise agreements with Chin

BHP Billiton and Rio Tinto are set to report sharp falls in profit caused by the decline in metal prices and volumes due to the global financial crisis.

Iron ore sales will play a key role in the first half earnings for both the companies, which are yet to finalise agreements with Chinese mills, Reuters reports.

Rio Tino's first half earnings could drop by 50% to $2.76bn due to losses in its aluminium business and writedowns on its Alcan packaging assets, according to predictions by Reuters.

The second half could prove worse as BHP's second half profits are expected to fall to $4.07bn from $9.37 bn in 2008, primarily due to writedowns on its nickel assets.

The companies, which announced a merger in June, have cut capacities and postponed a few growth projects late last year as demand slumped.