The plunging iron ore price has continued to hurt the fortunes of Australia's iron ore miners.

The world's biggest miner, BHP Billiton, said interim net profit fell by almost half, thanks in part to a supply glut of its own making which drove down iron ore prices.

Smaller Australian miners like Atlas Iron and BC Iron were the collateral damage as the iron ore giants, BHP Billiton, Rio Tinto, Vale and Fortescue Metals, competed with each other to ramp up production.

These small firms need iron ore prices above $US80 to maintain profitable margins but the benchmark price is currently trading at just above $US60.

The supply glut has caused iron ore prices to fall by around half since mid last year to just under $US64.00 a tonne, the lowest in more than five years.

BHP Billiton has reaped what it helped sow.

Net profit for the first half of the 2015 financial year fell by 47.4 per cent to nearly $US4.3 billion due to lower commodity prices but particularly because of the lower price of iron ore as the big producers battled it out for market share.

But BHP Billiton chief executive Andrew Mackenzie made no apologies while briefing analysts on the company's profit result.

"Strong supply growth most notably in iron ore and petroleum had led to weaker commodity prices," he told the briefing.

"Chinese demand for iron ore was flat over the period.

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"Over the medium term as new seaborne supply continues to exceed growth in demand we expect iron ore prices to remain subdued."

Investors were happy because they got their promised higher dividend payout.

BHP Billiton shares rose $0.94 or nearly 3 per cent to $33.06.

Investment adviser Giuliano Sala Tenna from Bell Potter Securities in Perth said it was a good result.

"The result was actually quite a strong one ... slightly ahead of our expectations," he told PM in an interview.

"And that's largely been driven by a ... better than expected performance than from the iron ore division.

"A lot of that has got a lot to do [with] their strong performance on cost reductions."

The iron ore supply glut has hurt high cost Chinese producers but small Australian miners are the meat in the sandwich in the big miners' price war.

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WA miner Atlas Iron made a record $1.1 billion dollar loss for the half year because of writedowns thanks to the falling iron ore price.

Ken Brinsden, Atlas Iron managing director, said the company slashed production costs per tonne of iron ore processed.

"I'm sure, in least at part, it's frustrating for shareholders," he said.

"But what sits below the result is the important work that's been going on in the company to continue to reduce our cost base.

In its financial accounts, Atlas Iron's auditors warned that the company may have to sell assets or raise more finance to repay its loans if the iron ore price fell further.

But Atlas said that it believed its cash flow forecasts were reliable and added that it applied for royalty relief from the Western Australian Government.

Mr Brinsden said the company made a small loss of about $1 per tonne of iron ore it sold over the half year.

He rejected suggestions that Atlas Iron was in trouble.

"We have plenty of cash in the bank and we are continuing to focus on reducing costs even further," Mr Brinsden said.

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Small Pilbara producer, BC Iron, also made a half year loss of just under $100 million because of writedowns and production problems.

BC Iron Managing Director Morgan Ball said in a statement that it was a difficult six months.

"It was a challenging half-year period for BC Iron with our financial results affected by both the soft iron ore price and clay-related production issues," he said.

Mr Sala Tenna was more pessimistic about the future of Atlas if iron ore prices did not pick up.

"You really need to see that benchmark price get back in the $US70s I think for Atlas to be washing its face in an all in cost perspective," he said.

"Otherwise I think it really is going to continue to lose money from here and that's not sustainable for any company."

Mr Brinsden said Atlas was soldering on with cost cutting but more job losses were unlikely.

"You can never say never but I wouldn't expect there is too much organisational change with respect to personnel to come," he said.

Atlas Iron shares ended the day down 2.4 per cent to $0.20.

BC Iron fell 6.6 per cent or $0.04 to close at $0.50.