Mining giant Xstrata saw profits fall in the first half of the year after it was hit by a drop in commodity prices as well as increasing costs.
The company posted revenues of $15.55bn down seven per cent on the same period in 2011.
Profits fell 23% to $2.19bn, with earnings per share also down 23% to 75c.
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"Commodity prices fell significantly, in particular for nickel and zinc, compared to the same period last year and were the major contributor to reduced profitability, while we were shielded from the full impact of lower spot prices by higher priced annual coal contracts," said Chief Executive Mick Davies.
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Nonetheless the company declared an interim dividend of 14 cents per share, representing an increase of 8% over last year.
"This increase marks our confidence in the medium term outlook for our business and prospects and our robust financial position, with gearing at a comfortable 19% at the period end, in the midst of our peak year for capital investment," Davies said.
Xstrata said improvement in second quarter volumes would provide good momentum for stronger second half production as new projects were commissioned.
The company said it was on the cusp of opening a new mine that would transform its copper operations in South America.
The $1.47bn Antapaccay copper project in southern Peru began commissioning on time and within budget, with first copper production scheduled for October, it said, while total mineral resources had been increased by 27% to over 1bn tonnes.
Together with three other projects set to be up and running this year, Xstrata aims to drive an increase in total copper production to an annualised rate of one million tonnes by the end of the year.
"With an industry-leading capital intensity of less than $10,000 per tonne and total capital cost of $1.47bn, Antapaccay will double current production at Tintaya, significantly reduce operating costs and provide more than 20 further years of operations," said Davis.
"Antapaccay will earn Xstrata's cost of capital at a copper price of $1.91 per pound over the life of mine," he added.
The company also announced that it had approved, subject to final Australian government approval, a $360m investment to more than double capacity at Xstrata Zinc's McArthur River Mine in the Northern Territory from 2.5m tonnes of ore to 5.5m tonnes per annum from 2014.
The project would increase annual zinc production to 380,000 tonnes and lead production to 93,000 tonnes, Xstrata said.
