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Sydney - Mining giant Rio Tinto Wednesday said it was suspending diamond production in Western Australia for up to three months, in its latest cutback in response to the global financial crisis.
The Anglo-Australian miner said it would also slow work on the $1.5bn development of an underground operation at the Argyle Mine in Western Australia's Kimberley region.
"Given global market conditions, we will also reduce diamond production by taking an extended maintenance shut-down of the diamond processing facilities for up to three months," said Kevin McLeish, chief operating officer of the Rio Tinto subsidiary Argyle Diamonds.
McLeish said the shutdown would begin in March.
The decision is the latest in a string of cutbacks by Rio Tinto in recent days as it attempts to slash debt in the face of flagging demand caused by the global financial crisis.
On Tuesday Rio announced it was suspending a $229m copper and gold mine development in eastern Australia because of low commodity prices and deferring a $371m automated train project in the iron-ore rich west.
One day earlier, the group postponed the $2.15bn expansion of its Corumba iron ore mine in Brazil due to the worldwide slowdown.
Analysts expect more cuts to be announced after Rio releases quarterly production figures on Thursday.
The company has already said it will cut 14 000 jobs and reduce capital spending by five billion US dollars to help shrink its $38.9bn debt amid sluggish demand for commodities.
The underground project at the Argyle operation was due to be completed by 2010 and was designed to extend the life of the mine, which currently produces about 20 million carats of diamonds a year, past 2018.
The slowdown means only critical development activities will be completed.
The Rio news comes during a bad week for the Australian mining industry in which Xstrata and OZ Minerals also shut down zinc operations, bringing to more than 5 000 the number of mining job losses since July, The Australian newspaper said.
- AFP