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STORY: Rio Tinto reported a 29% drop in first-half profit Wednesday (July 27).

The mining giant also more than halved its dividend.

It was hit hard by a range of problems, including higher costs and labor shortages.

Iron ore prices also cooled due to weaker demand from top buyer China.

Rio made an underlying profit of around $8.6 billion for the six months ended June.

That was down from more than $12 billion a year before.

The firm also cut its capital investment forecast for this year by $500 million to $7.5 billion.

Rio CEO Jakob Stausholm called the pricing environment ‘challenging’, but said he was still optimistic about the outlook for demand.

He was also positive about China in the medium term, saying it has the means to revive growth.

Rio shares were down over 3% in early trades.