Less than a month ago MIM said it expected a net profit for the half of $50-65 million.
The profit warning was based on current commodity prices and an Australian/US dollar exchange rate of around 65 cents.
The downgrade is expected to sway some retail investors that may have been prepared to back major shareholder Platinum Asset Management's objections to the MIM board's support of the takeover bid by Xstrata.
Earlier this month UBS Warburg suggested the appreciating Australian dollar had taken away about $50 million in earnings since Xstrata launched its bid in early April. UBS said every 1c appreciation by the Australian dollar cost MIM $11 million in earnings.
Operationally, MIM had a bad start to the current half, with copper, zinc and some of its coal mines suffering reduced March quarters.
Shares in MIM were unchanged following the warning at $1.65 a share.
