Fortescue Metals Group is taking a bullish view of China’s economic prospects even as the Australian miner reported an 88 per cent fall in profits amid a steep slide in iron ore prices.

Along with fellow mining group South32, Fortescue on Monday outlined plans to slash costs and capital expenditure to ride out steep falls in commodity prices, which reflect slowing growth in China.

BHP Billiton is also expected to outline cost cuts when it reports annual results on Tuesday.

“We remain confident in our own competitiveness and the strong fundamentals of the Chinese market,” said Andrew Forrest, Fortescue’s chairman and owner of a third of the company’s shares.

He said Chinese growth remained strong and government stimulus, including a US$140bn “Belt & Road” infrastructure plan, would drive demand for steel for decades to come.

However, Mr Forrest took another swipe at industry leaders BHP, Rio Tinto and Vale for ramping up production at a time of oversupply in the iron ore market, likening this policy to “market vandalism”.

Shares in Fortescue fell 14.6 per cent to A$1.64 on Monday in a broader market that fell 4.1 per cent, rattled by a rout in China equities.

The market capitalisation of the company, which has net debt of US$7.2bn, has shrunk to A$5bn from more than A$20bn at the peak of the commodity boom in 2011.

Fortescue is almost entirely dependent on Chinese demand for iron ore. A surge in iron ore production and China’s cooling economy have sapped demand for iron ore and steel, sending prices to a seven-year low in July.

The miner said net profit after tax fell 88 per cent to US$316m for the 12 months to the end of June, from US$2.74bn a year earlier. That was shy of analyst expectations of US$416.8m, and raised some worries over the company’s ability to repay its debts.

South32, spun out of BHP in May, is not reliant on a single commodity as is Fortescue, and is much less dependant on China, which is responsible for about 11 per cent of its total sales. It said it planned to reduce costs by a further US$350m per year or more by the end of financial 2018 and cut sustaining capital expenditure by 9 per cent to US$650m in 2016.

Nev Power, chief executive, said Fortescue was “very comfortable” with its ability to meet its debt commitments, since a first payment was not due until 2019 and the company was slashing costs.

Credit rating agencies S&P and Moody’s have warned that its ratings could be cut if iron ore prices fell further or Fortescue was unable to meet cost-cutting targets.

Fortescue spent US$626m in capital expenditure for fiscal 2015 compared with US$1.93bn a year earlier, and said it was on course to cut the direct cost of mining and processing ore in 2016 to almost a third of levels in 2012.

“The reality is, if commodity prices keep falling, costs have to do likewise,” said Clarke Wilkins, analyst at Citi. “At the current iron ore prices, Fortescue is generating enough cash flow to meet its debt obligations. But if iron ore falls to around US$40 per tonne, it could face a US$5bn funding shortfall in 2019.”