* Shares fall around 2%
* Plans to suspend cobalt output from Mutanda from year-end
* Analysts disappointed, still say Glencore undervalued (Adds comment, detail, analysts, share price)
By Yadarisa Shabong and Barbara Lewis
LONDON, Aug 7 (Reuters) - Glencore reported a 32% drop in first-half core profit on Wednesday, sending its shares to their lowest since late 2016, and said it would suspend output at the world's biggest cobalt mine because of a steep fall in prices.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were $5.58 billion for the six months ended June 30, compared with $8.18 billion a year earlier.
The company's shares were trading 2.4% lower by 0818 GMT.
Chief Executive Ivan Glasenberg blamed "a challenging economic backdrop for our commodity mix" and setbacks during the ramp-up of operations in Africa.
Glencore stands apart from other diversified miners because of its high-profile trading division and an appetite for risk that in the past has appealed to investors.
It initially rebounded strongly from the commodity crash of 2015-16.
But the battery mineral cobalt, which was meant to be part of Glencore's strategic advantage as the world switches to electrification, has become a liability.
Supplies are concentrated in the Democratic Republic of Congo, where Glencore is in a dispute with the government over a mining law. It is also subject to a U.S. Department of Justice investigation.
Explaining the rationale for placing the Mutanda copper and cobalt mine in the DRC on "care and maintenance" from the end of this year, Glencore said the mine's economic viability had deteriorated because of low cobalt prices, poor access, increased costs and higher taxes.
Hit by oversupply, cobalt prices have shrunk from above $60,000 per tonne in late 2018 to around $25,000.
Copper prices are also subdued, as trade tensions between the United States and China have weighed on commodity markets.
Glencore said last week it had begun an overhaul of its underperforming Africa business after the company faced a $350 million hit because of lower cobalt prices.
The company also said on Wednesday its net debt to EBITDA ratio had crept above its target to 1.24 times.
The ratio is an important measure of available cash for the capital-intensive mining industry. Glencore said the level was "still healthy" but sought to move towards a ratio of one over the next six to 12 months.
Analysts had expected Glencore to report core earnings of $5.94 billion in the first half, according to a company-compiled consensus of 12 estimates.
In a note, Credit Suisse said the "silver lining" was that the closure of Mutanda would boost the cobalt market. The mine produced around 13,000 tonnes of cobalt in the first half and accounts for 15% of global supplies, Credit Suisse estimated.
It reiterated its "outperform" rating, saying: "Despite the likelihood of further negative newsflow, our outperform rating is underpinned by Glencore’s highly attractive valuation versus its peers."
Additional reporting by Pushkala Aripaka in Bengaluru; Editing by Dale Hudson and Anil D'Silva