TOM ALBANESE, chief executive of Rio Tinto, is to save billions of dollars in a huge crack-down on capital spending that could mothball several big mining projects around the world.

In a conference call to his top managing directors last week he made cost-cutting a priority as the company moves to reduce debts of $40 billion (£26 billion).

Rio was taken by surprise last week when BHP Billiton decided to abandon its year-long battle to take it over for £43 billion. BHP said the economic environment had changed and it was now harder to raise debt finance and push through the disposals needed as part of the takeover.

Rio is now going to postpone starting work on big aluminium and iron-ore projects in countries including Africa and Canada to conserve cash. It will also delay starting another phase at its giant Pilbara iron-ore mine in Western Australia.

Analysts said Rio has big borrowings at a time in the cycle when commodity prices are falling. However, Albanese is confident that the company is still generating sufficient cash to meets its debt repayments.

Albanese is also confident he can sell assets despite buyers finding it hard to raise debt finance. Last year Rio took on huge debts to finance its acquisition of Alcan.

At the time it pledged to raise $15 billion from the sale of noncore assets such as Alcan’s packaging business. So far it has only raised $3 billion. These disposals could now stretch into next year but several buyers are still interested.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts