Mining giant BHP Billiton Wednesday delayed expansion of its huge Olympic Dam project as it posted a near 35 percent slump in annual net profit in a sign the global slowdown is hurting commodities. The world\'s biggest miner put plans to grow the copper and uranium mine in Australia on hold after a 15 percent plunge in underlying earnings due to softer prices for most of its products through 2012. BHP\'s first profit drop in three years to US$15.42 billion is a significant reversal of fortunes for the company following a record US$23.6 billion profit last year -- the largest ever recorded in Australian corporate history. Though BHP achieved record annual production at 10 of its operations, including its flagship west Australia iron ore business, slowing global growth and uncertainty over the outlook hit commodity prices, undercutting profit. \"Concerns surrounding the stability of the eurozone and the decline in economic activity that accompanied the managed slowdown of growth in China led to significant market volatility in the 2012 financial year,\" BHP said. \"In the short-term, we expect volatility in commodity markets to persist as temporary weakness in the manufacturing and construction sectors across all key markets is expected to weigh on market sentiment.\" As a result, BHP chief Marius Kloppers said the company would explore a \"less capital-intensive design\" for its mammoth multi-billion dollar Olympic Dam expansion which would likely make it the world\'s largest open pit mine.\' \"We will continue to work on technological and design alternatives that have the potential to substantially improve the economics of the expansion,\" Kloppers said in a statement to the stock market. Australia\'s Resources Minister Martin Ferguson said he was not surprised by the Olympic Dam delay given current conditions but expressed confidence in the mining industry. \"This is a commercial decision, purely a commercial decision,\" Ferguson told reporters. \"New investment is going to be challenging for a variety of boards for some time to come.\" South Australian Premier Jay Weatherill said the shelving of the Olympic Dam plans, reportedly a US$20 billion development, was \"a major disappointment\" but he was confident the project would eventually go ahead. \"I\'ve been told by BHP that it\'s their wish to proceed with the expansion,\" he told reporters. The profit figure was weighed by writedowns from BHP\'s US shale gas and Australian nickel assets and US$342 million in charges related to the suspension or early closure of operations and the Olympic Dam delay. Only iron ore, petroleum and energy coal were earnings-positive in the year to June 30, and the strong Australian dollar and exchange rate volatility shaved US$820 million from the bottom line. BHP said it had been \"quick to respond\" to the weaker operating conditions, closing energy-intensive silicomanganese alloy production in South Africa and temporarily shutting a manganese smelter and coal mine in Australia. \"The viability of other high-cost operations is being assessed and additional measures are being implemented that will substantially reduce operating costs and non-essential expenditure across the business,\" BHP said, warning there would be \"no major project approvals\" in the next 12 months. The mining giant warned of job losses at its Australian operations earlier this month due to sagging Chinese demand and the ongoing turbulence in Europe, but there were no references to this in the results data. In the medium-term, BHP said it expected a \"measured improvement in the external environment\" beginning in the first half of the 2013 financial year, driven particularly by growth in China. The company declared a dividend of 112 US cents per share, up 11 percent on the previous year, with the stock finishing 0.33 percent lower at Aus$33.16. Peter Esho, chief market analyst at City Index Asia Pacific, said the miner had a sound balance sheet and this could lead the shares upward. \"We wouldn\'t be surprised, based on what has been reported today, to see the shares continue to drift higher towards Aus$35 per share between now and the end of this year,\" he said.