Rio Tinto posts $866M loss, blames deteriorating economy

SYDNEY – Mining company Rio Tinto said Thursday it suffered a loss of $866 million in 2015 as deteriorating economic conditions around the world pressured prices of commodities such as iron ore and coal.

The Australian mining giant on Thursday reported that 2015 revenue slumped to $34.8 billion from $47.6 billion the year before. It earned profit of $6.5 billion in 2014.

Rio said it will reduce capital expenditure to $4 billion this year and $5 billion in 2017, which is $3 billion less than its previous plan.

The company’s earnings statement said the global economy “presented significant challenges to the mining industry” last year.

Growth in developing economies “solidified” but was not strong enough to boost global trade while a slowdown in Chinese industry and construction was “negative for commodity demand.”

Rio said the least efficient commodity producers are “exiting” the business but the gradual withdrawal of supply is insufficient to boost prices without an improvement in demand.