Thursday, December 11, 2008

Rio Tinto targets $7-billion in spending

More than $6.8-billion (U.S.) in Canadian spending commitments made by RioTinto PLC are being delayed or suspended as the London mining giant wrestles with the crushing debt load it took on to buy Alcan Inc.

Rio is suspending an $800-million expansion of its iron ore operations in Labrador and initiating a drastic company-wide cost-cutting plan that will see a dramatic slowdown in spending on three Canadian aluminum smelter projects in Quebec and British Columbia worth about $6-billion.

"Everything has fallen off a cliff to a degree that no one anticipated," Rio Tinto Alcan chief executive officer Dick Evans said in an interview yesterday.

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