Rio Tinto says weak market conditions have forced it to abandon a nearly two-year effort to sell a portion of its aluminum assets.

The mining giant announced Thursday that divestment of its Pacific aluminum assets is not possible in the current environment. The six assets in Australia and New Zealand will be reintegrated into the Montreal-based Rio Tinto Alcan division.

We continue to make good progress to transform our businesses through divesting or closing non-core assets, business improvement and targeted investment, said chief executive Sam Walsh.

But we need to do more to improve performance and returns.

Rio Tinto said its net earnings plummeted to US$1.72 billion in the first half of the year, from $5.88 billion a year earlier.

Adjusting for one-time items, earnings fell 18 per cent to US$4.2 billion, it said.

RELATED: Rio Tinto Alcan to close aluminum plant in Shawinigan, Quebec affecting 425 workers

Revenue decreased to $26.6 billion from $27.8 billion a year ago.

Despite the declines, the company has increased its interim dividend 15 per cent to 83.5 cents US per share.

Rio Tinto said it has cut US$1.5 billion in costs and cut 2,200 net positions over the past year after adding 1,800 new jobs to support its iron ore expansion.

Walsh said the medium-term economic outlook remains volatile, with many outcomes possible. Chinese economic growth has slowed and is unlikely to recover significantly in the second half.

We do not expect a hard landing, he said.

This global economic volatility only serves to highlight the need to build a stronger and more resilient business.

The results were announced less than a day after Rio Tinto Alcan said weak metal prices forced it to close its smelter in Shawinigan, Que., more than a year ahead of schedule.

Half the aluminum production will be immediately curtailed, with the remaining 50,000 tonnes stopping by the end of November.