Mining giant BHP Billiton has reported an 86 percent drop in annual profit amid plummeting commodity prices.

The Melbourne, Australia-based company on Tuesday reported a net profit of $1.9 billion for the 12 months to June 30. That's down from $13.8 billion a year ago. Revenue was down 22 percent to $52 billion.

Miners such as BHP are under increasing pressure as a slowdown in China's economy results in lower demand for key commodities, such as iron ore and coal.

In response, BHP said it would cut costs. The company lowered its target for capital spending in the next financial year from $9 billion to $8.5 billion.