Top global miner BHP Billiton delayed its planned $20 billion Olympic Dam copper expansion yesterday and said no major projects would be approved in the year to June 2013, as it battles escalating capital costs.

BHP reported a 35 per cent slide in second-half profit and its first fall in annual profit in three years in the face of falling commodity prices as China’s economic growth cools, wrapping up a torrid earnings season for the world’s biggest miners.

“It’s pleasing to see that there’s some capital discipline from the company, so they are not ploughing ahead irrespective of current difficult economic conditions,” said Tim Schroeders, a portfolio manager at Pengana Capital in Melbourne.

Big miners have all been battered by weaker prices for iron ore, copper, coal, nickel and aluminum as economic growth in big-buyer China slows this year to what is expected to be its weakest pace in more than a decade.

Expanding Olympic Dam, the world’s fourth-largest known copper deposit and largest uranium source, was one of three mega projects that were due to go to the BHP board for final approval by December in an $80 billion pipeline of projects that BHP had flagged were likely to be slowed.

Now, the Anglo-Australian giant said no major new projects would be approved before next June.

BHP chief executive Marius Kloppers said the company needed to take a fresh look at the Olympic Dam expansion. He cited high project costs, partly due to a strong Australian dollar, and volatile commodity prices, which BHP sees persisting short term.

“What has changed is the capital cost of construction, what has changed is that post-Fukushima there is a different and still developing outlook on things like uranium, gold prices have changed,” he told reporters.

“There have been a number of (changes) here, but the most important one is capital costs have gone up, which is an industry wide phenomenon.”

Investors, who have been pressing the major miners to return capital to shareholders rather than splash out on major projects amid global uncertainty were relieved BHP had decided to hold back on the project to quadruple copper output from Olympic Dam.

BHP’s second-half attributable profit before exceptional items fell to $7.16 billion from $10.98 billion a year earlier, as calculated by Reuters from the full-year results. That was slightly ahead of analysts’ forecasts around $6.96 billion.

Full-year profit to the end of June fell to $17.1 billion from $21.7 billion a year earlier.

BHP has also been hurt by lower natural gas prices and industrial action at its coking coal mines, with its bottom line marred by $2.5 billion in writedowns on its shale gas and nickel assets and charges on projects, including Olympic Dam.

BHP said $22 billion worth of capital spending in the year ahead on projects already approved would go ahead. The expansions underway would boost BHP’s production volumes substantially by the end of 2015, including a 50 percent increase in coking coal output, Kloppers said.