BHP Billiton, the world's biggest mining company, said it will take steps to cut costs to combat weakening commodities markets, three weeks before it is expected to report its first decline in annual profit since the global financial crisis.

"Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads, operating costs and non-essential expenditures to ensure our assets are well positioned on their relative cost curves," Fiona Martin, a BHP spokeswoman, said on Wednesday.

"This includes reviewing our overhead costs and the sequencing of our major projects."

The comments comes amid mounting expectations that BHP will postpone one or more mega-projects it has proposed until economic outlooks in Europe and China improve.

BHP Chief Executive Marius Kloppers is scheduled to meet on Wednesday with Colin Barnett, the highest-ranking political leader in Western Australia state, where BHP this year mined and exported 159 million tons of iron ore -- the lion's share to Chinese steel mills -- and is spending billions of dollars on expansion work.

Expansion work underway to boost iron ore production by 5% in fiscal 2013 will continue as planned, according to the spokeswoman.

BHP has yet to give the green light to development of its Outer Harbour project in Western Australia, one of three huge projects in an $80 billion pipeline that BHP has slowed.

In February, BHP committed $779 million in preliminary funding ahead of a board review before signing off on the project, which would have an initial capacity to handle 100 million tons of ore a year.

BHP is tipped to report on Aug. 22 about a 22% decline in underlying earnings for fiscal 2012 to $16.990 billion, based on analysts estimates.

Benchmark international iron ore prices hit their lowest level in more than 2-1/2 years on Friday as China's slowing economy cut global demand growth.

RioTinto

Rival Rio Tinto said on Wednesday it is cutting staff in Australia and closing its Sydney office as it too battles falling commodity prices and threats to demand from Europe's debt crisis.

Around 30 support and services staff in Sydney and an undisclosed number of employees at the company's much larger operations in Melbourne would be cut, Rio Tinto's Australian manager David Peever told Reuters by telephone.

"We are undertaking a review of our support and services functions. There will be a reduction in the size of our Melbourne office and, yes, we do intend to close our Sydney office as well," Peever said from Paris.

"It's just making sure we are building in resilience in our business to deal with what is essentially a difficult time. We are seeing downturns in commodity prices, European circumstances are hovering over us, and we need to make sure we are very measured in terms of our approach to cost control," he said.

Rio's Melbourne CBD office employs around 240 staff while another 200 work from the suburb of Bundoora. Most of the downsizing would occur in the Melbourne city office, Peever said.

Last month, Rio said it was cutting an unspecified number of jobs at its Clermont coal mine in Australia as it battles sliding thermal coal prices.

"I'm not aware of new ones (miner job cuts) since then," Peever said.