In 2012, the company’s first half profit was just under $6.1 billion. But the first half profit for the 2013 half year is almost $1.7 billion.

Despite the drop in profits, dividends rose 15%. An interim dividend of US83.50c was announced, up from 72.50c last year.

First half earnings of $4.2 billion were down 18% from the previous corresponding period.

Net earnings of $1.7 billion were substantially down on the 2012 figure of just under $5.9 billion. This included “non-cash exchange losses of $1.9 billion and a $300 million write-off of waste stripping costs and damaged equipment at Kennecott Utah Copper, following the pit wall slide at Bingham Canyon in April”

The latest figures include $1.5 billion of “total cost improvements achieved.”

Cash flow of $8 billion was in line with the same period in 2012.

Rio Tinto chairman Jan du Plessis cited lower resource prices and higher taxes for the drop in profits.

He said: “Our business has demonstrated considerable resilience against a backdrop of continuing market volatility.

“Cash flows from operations were strong, driven by our cost savings programs, but lower prices and a higher tax rate led to a reduction in underlying earnings to $4.2 billion in the first half of 2013.

“Our strategy to invest in and operate large, long-life, low-cost, expandable operations remains unchanged.

“Sam and his team are seeking to simplify the portfolio through the divestment of non-core assets, but only where we can realise value for shareholders.

“Our interim dividend increased by 15 per cent, in line with our policy and reflecting the increase in our 2012 full year dividend.”

Chief executive Sam Walsh was happy that cost savings of $1.5 billion had been met.

He said: “We are seeing good early results of our business performance initiatives in our pursuit of greater value for shareholders.

“We have achieved $1.5 billion in total cost reduction efforts in the first half, with $977 million from operating cost savings and $483 million from lower exploration and evaluation spend.

“This has driven strong operating cash flows, on a par with the first half of 2012, despite the weaker prices for most of our products.

“Capital expenditure has been reduced, approved growth projects are on track and operations are performing well.

“We have set ourselves firmly on the path toward becoming a leaner, more tightly-run business.

“Across the group, we are focused on improving performance at every location.”

He added: “Our cost saving program is gathering momentum and we have more than 1500 separate initiatives that are helping us reduce costs and preserve margins, even in a climate of lower prices.

“We have driven down our unit costs by more than nine per cent compared with the first half of 2012.”

Capital expenditure reduced by 9% to $7 billion in the first half of the year, with overall expenditure for the year expected to be double that.

The Oyu Tolgoi copper-gold open pit mine in Mongolia is operating at 80 % capacity. But funding for phase 2 of the underground expansion has been delayed pending discussion with the Mongolian government.

Rio Tinto said phase 1 of the Pilbara iron ore expansion 20,290 million tonnes per annum was on budget and scheduled to be delivered in September this year.

Chief executive Sam Walsh said: “The medium-term economic outlook remains volatile, with a broader range of outcomes now possible.

“Chinese economic growth has decelerated so far this year and is unlikely to recover significantly in the second half, but we do not expect a hard landing,” he added.

“This global economic volatility only serves to highlight the need to build a stronger and more resilient business.

“I have reinforced our capital allocation processes to ensure that we are only investing in the best opportunities.

“We have reduced capital expenditure from the peak level of last year and we expect it to be 20 per cent lower in 2013.

“We have made steady progress in improving our portfolio this year, with $1.9 billion of divestments announced or completed to date, including a binding agreement for the sale of our interest in Northparkes and recently completed sales of Palabora and Eagle.

“As always, any decision to sell is driven by value. For this reason, we have decided to retain our diamonds businesses, which are high-quality assets.”

He added: ““Following a comprehensive review we have also determined that the divestment of Pacific Aluminium for value is not possible in the current environment and it will be reintegrated into the Rio Tinto Alcan group.

“Our global aluminium business is one of the best performing in a challenging industry.

“And we are delivering our approved growth projects. A major milestone was achieved in July, when Oyu Tolgoi started shipping concentrate to customers from its open pit copper and gold mine in Mongolia.

“In the Pilbara, we are poised to commission the first phase of our major iron ore expansion to 290 million tonnes a year.

“We have started ore stacking at the Cape Lambert expansion and will commence shipping during September.

“Completion of this major project on budget and ahead of the original schedule is a tremendous achievement.