Rio Tinto to cut 14 000 jobs

Sydney - The Rio Tinto Group will cut 14 000 jobs worldwide and reduce capital investment as part of new measures to reduce its debt amid waning demand for iron ore and other metals, the mining company said on Wednesday.

Rio Tinto said in a statement it will try to sell "significant assets" that were not previously listed for sale in order to reach its goal of trimming AU$10bn from its debt by the end of next year.

The job cuts - 12.5% of its work force - and reduction in operating expenditure are expected to save the company at least AU$2.5bn a year by 2010, the London-based company said.

"Given the difficult and uncertain economic conditions, and the unprecedented rate of deterioration of our markets, our imperative is to maximize cash generation and pay down debt," chief executive Tom Albanese said in the statement. "We have undertaken a thorough review of all our operations and are executing a range of actions."

"By taking these tough decisions now we will be well positioned when the recovery comes," Albanese said.

Rio Tinto's AU$38.9bn debt was a key factor in rival BHP Billiton withdrawing its hostile takeover bid last month in the midst of the global economic downturn. Much of that debt is from its $38.1bn acquisition of Canadian company Alcan last year.

The world's second-largest aluminium producer stressed it remains committed to its strategy of finding, developing and operating large, long life, low cost mining assets.

The company currently expects its global iron ore production and shipments for fiscal 2009 to be around 200 million metric tonns. Aluminium production is forecast at 200 000 tons and copper production at 830 000 tons.

Rio Tinto is counting on the further industrialisation of countries such as China and India to support higher levels of demand for metals and minerals.

The Australian stock market closed before the announcement. Rio Tinto shares rose 12.14% to AU$37.40 on Wednesday.

- AP