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Rio Tinto First-Half Profit Slumps, Cautious on Price Rally

Published: Thursday, 20 Aug 2009 | 2:45 AM ET

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By: CNBC.com

Rio Tinto, the world's second-largest miner, reported a 54 percent drop in first-half earnings on Thursday, its biggest half-year slump on record, as aluminium prices and demand collapsed.

Rio Tinto
The company, which has eased its debt woes with recent asset sales and a $15.2 billion share sale, said it remained cautious about a recent rally in metals prices.

Underlying January-June earnings fell to $2.565 billion from $5.526 billion a year ago, in line with analysts' forecasts for around $2.6 billion.

Rio's [RIO-LN Loading... () ] bottom line was hit by writedowns and a $195 million break fee paid to Chinalco for spurning the Chinese state-owned group's planned $19.5 billion tie-up in June. Rio instead launched a rights offer and lined up an iron ore joint venture with rival and former suitor BHP Billiton [BLT-LN Loading... () ].