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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (30480)	12/17/2008 9:15:10 PM
From: LoneClone	Read Replies (1) \| Respond to of 194964

Rio Tinto unit pulls investment from Saudi project Wednesday December 17, 7:57 pm ET By Sandy Shore and Tarek El-Tablawy, AP Business Writers ca.us.biz.yahoo.com Rio Tinto subsidiary pulls investment out of Saudi project, cites global economic woes DENVER (AP) -- A subsidiary of global mining giant Rio Tinto Group said Wednesday it is pulling its investment out of a $7 billion Saudi Arabian aluminum project due to the weakening global economy. Montreal-based Rio Tinto Alcan said it will not be an equity partner with Saudi Arabian Mining Co., commonly known as Ma'aden, opting instead to provide technical assistance and support. "The recent global financial and economic crisis has changed Rio Tinto's outlook for project development throughout the world," Rio Tinto Alcan Chief Executive Dick Evans said in a statement. The announcement from Rio Tinto Alcan is the latest in a string of spending cuts and layoffs that have been announced in the world's mining companies as demand for metals slows. Metals such as copper, nickel and aluminum are used in a variety of products from housing construction to electronics. Last week, London-based Rio Tinto Group said it would cut 14,000 jobs worldwide and reduce capital investment as part of new measures to reduce its debt, blaming slowing economic conditions. The job cuts were equal to about 12.5 percent of the company's 112,000-person work force. The operating expense cuts were expected to save at least 2.5 billion Australian dollars ($1.6 billion) a year by 2010. Companhia Vale do Rio Doce SA, the world's largest iron ore producer, has made production cuts at its Indonesian and Canadian nickel operations. It also implemented a voluntary retirement program in Canada to cut eliminate jobs. In the United States, Phoenix-based Freeport-McMoRan Copper & Gold Inc. announced similar moves for its copper mines in Arizona and New Mexico and has issued layoff notices to about 1,400 since November. About half the 80-member work force at the Kensington Mine near Juneau, Alaska, has been laid off as well as 21 percent of the workers at Montana's Stillwater Mining Co., the only U.S. producer of palladium and platinum. While oil-rich Saudi Arabia has weathered the crisis better than most countries, officials are taking aggressive measures to ensure that the credit squeeze and slumping oil prices do not derail development efforts. The country's central bank on Tuesday cut the repo rate for the second time in a month to boost liquidity for the corporate sector. But several analysts predict that the roughly 5 percent growth rate the kingdom has enjoyed this year will fall to around 1.5 percent to 1.9 percent in 2009. In a statement posted on the Saudi stock exchange's Web site, Ma'aden said it is reviewing a number of options to develop the aluminum project at a lower cost. Abdullah al-Dabbagh, Ma'aden's president and chief executive, said it was "fortunate because now we can re-evaluate the project's criteria in light of the current global financial crisis before entering into large financial commitments." Rio Tinto Alcan spokesman Stefano Bertolli said his firm is continuing to review projects across the board although no layoffs have been made. "We've announced we'd be slowing down some investments and some projects," he said in a telephone interview. Ma'aden is a Saudi Arabian joint stock company that facilitates the development of that country's non-petroleum mineral resources. The cost of the project was initially estimated at $7 billion when Ma'aden signed the deal in 2007, but the price-tag has since mushroomed. The integrated complex would be built in the Minerals Industrial City at Ras Al Zour on Saudi Arabia's east coast. It includes a 1.4 million ton per year alumina refinery, an aluminum smelter with a capacity of 650,000 tons per year and a power plant. Rio Tinto's shares dipped $1.83 to close at $96.92.