World News Australia reported that analysts have slashed their predictions for mining giants Rio Tinto and BHP Billiton’s 2009 profits by almost half in the face of plummeting metal prices.

A recent Merrill Lynch report revised its estimates of Rio Tinto’s earnings this year to USD 4 billion, 45% less than last predicted according to the newspaper, while analysts expect mining mogul BHP’s earnings to crash 17% to USD 8.8 billion.

Prices for Australia's top exports iron ore and coal will determine how far the companies’ earnings plunge in 2009. Rio could lose USD 852 million if iron ore prices drop 10% from current estimates according to Goldman Sachs and a further USD 739 million if aluminium sold at 12 cents less per pound than expected. If prices for both commodities dropped, Rio would lose half of its profit.

Another analyst said that the Australian Rio was expected to suffer more than BHP due to its dependency on steelmaking iron ore. He pointed out that commodity prices have recently been performing consistently at the bottom end of expectations.

(Sourced from World News Australia)