Mining giant Rio Tinto said its net earnings for the first six months of 2009 dropped by 65% to $2.5bn, compared with the same period in 2008, as the global economic crisis resulted in a sharp fall in minerals and metals prices.

Rio cut 16,000 jobs in the first six months of the year, ahead of its target of 14,000, as it took swift and decisive action to combat falling prices, the company said.

The firm’s underlying earnings for the first six months of 2009 fell by 54% to $2.6bn, compared with the same period in 2008.

Prices of nearly all of Rio’s commodities declined, with average copper and aluminium prices dropping by 50% while molybdenum prices fell by 74% from the previous year.

Diamond prices were severely affected by the global economic downturn although gold prices remained consistent with previous year’s figures, Rio said.

Rio reduced its net debt of $39.1bn by $14.8bn following a successful competition of its rights issue on 3 July

Rio chairman Jan du Plessis said that the company now had a leaner cost base and was better positioned with renewed financial strength.

“We remain cautious about the recent rally in prices. However, the expectation that development in emerging markets will generate underlying strength in metals and minerals demand over the long term remains broadly unchanged,” du Plessis said.