The Australian reported that RIO Tinto has been forced to jettison a USD 10.5 billion aluminium project in Saudi Arabia, as the global economic crisis continues to bite into metals demand.

As it prepares to slice 14,000 jobs globally and pull back billions on spending, Rio said that it would not help fund the massive Ma'aden bauxite mine, alumina refinery and aluminium smelter in which it had a 49% stake.

Mr Dick Evans CEO of aluminium business of Rio said "The recent global financial and economic crisis has changed Rio Tinto's outlook for project development throughout the world. Under these circumstances, Rio Tinto Alcan has elected to not participate as an equity partner.”

Rio described its move to not fund the Saudi project as a role alteration and said it was in talks to supply technology support and general advice. It also said it had agreed with its partner in the project, Saudi Arabian Mining, to consider the possibility of future participation.

The move is the latest from Rio, which is trying to bolster its balance sheet and pay down some of the USD 38.9 billion worth of debt left after the 2007 acquisition of Alcan.

(Sourced from The Australian)