Rio Tinto (LON:RIO) underlined the crisis afflicting the mining industry as it slumped into the red, cut future dividends and started another round of cost savings.
Most of the commodities it mines have seen prices collapse over the past year with iron ore, in particular, declining by 80%.
After a raft of one-off charges, there was a net loss in 2015 of US$866mln (US$6.5bn profit), though on an underlying basis Rio stayed in the black albeit with halved profits of US$4.5bn.
This slightly undershot analysts’ expectation though Sam Walsh, chief executive, said it was a ‘strong performance’ given the highly challenging environment.
Rio generated US$9.4bn of cash over the year, he said, and cash flow will remain the focus in the near future.
As a result, the progressive dividend policy has been abandoned and the maintained pay-out of US$2.15 in 2015 will fall to US$1.10 in 2016.
Capital expenditure is also being slashed by a further US$3bn, to US$4bn and US$5bn in the next two years, with cost cuts of US$1bn also pencilled in for each of the next two years.
Walsh expects only a moderate improvement in global growth in 2016, though longer term he said demand should recover from the current cyclical low phase.
Shares crashed 9% to 1,610p.