Weaker growth in China's powerhouse economy and higher risks around big projects have forced Glencore Xstrata to take a £4.9 billion hit on its commodities and mining mega-merger.
Metals prices fell 15% on average during the first six months of the year on global oversupply, the company said, as it booked a 7.7 billion US dollar impairment charge on the goodwill in Xstrata's mining business.
But the group, which combined Xstrata's mining operations with Glencore's commodity trading expertise in May, said the global economy is making "slow but steady progress", while it continues to slash costs.
Commodity price "pessimism" drove underlying earnings in its mining business 39% lower to 2 billion US dollars (£1.3 billion) during the first six months of the year, but its trading arm saw profits before tax and interest increase 6% year-on-year to 1.2 billion US dollars (£757 million).
Across the group, underlying earnings dived 28% to 3.2 billion US dollars (£2 billion) from 4.4 billion US dollars (£2.8 billion) a year earlier. Shares fell more than 3%.
The merger aimed to provide a buffer against volatile commodity prices through its trading business, but r evenues dipped 2% to 121.4 billion US dollars (£775 billion).
Worries over slowing growth in emerging economies such as China and Brazil have weighed heavily on commodity prices in recent months as traders fret over weaker demand.
Rival BHP Billiton today also revealed a 22% slump in underlying annual profits, which fell to 21.1 billion US dollars (£13.5 billion) during the year to the end of June. BHP's revenues were 6% lower at 66 billion US dollars (£42 billion) after six months of weaker-than-expected growth in emerging markets.
Glencore said South African coal prices fell 15% during the six months, while nickel declined 12%, silver was down 14%, gold fell 8% and copper dropped 7%.
But Glencore boss Ivan Glasenberg insisted China's growth remains "healthy by any standard", despite output in the world's second-biggest economy slowing to 7.5% in the second quarter of the year from 7.7% in the first quarter.
Glencore said the writedown was based on "negative broader macro-economic environment facing the extractive industry, particularly around the actual and perceived heightened risks associated with greenfield and large scale expansion projects during the first half of 2013".
It also blamed the eight-month time lag between pricing the acquisition in September 2012 and completing it in May.
Mr Glasenberg said Glencore is taking a " disciplined" approach to major investment and has made "excellent progress" integrating the businesses.
Glencore plans cost-cuts of more than 500 million US dollars (£320 million), and last month it revealed it is halting production of iron ore in Australia, where margins have slumped.
It also recently announced the sale of Australian grain handling business Joe White Maltings to US commodities group Cargill, and is selling its Las Bambas copper mine project in Peru.
"The capital invested by commodity producers over the past decade has dwarfed returns to shareholders," said Mr Glasenberg.
"Many commodities now face near term oversupply and unsustainable returns, despite robust demand.
"We remain keenly focused on the disciplined and timely deployment of capital."
The takeover created a group with more than 190,000 staff and over 150 mines and production sites in more than 50 countries, headquartered in Switzerland.