Rio Tinto Warns of Slowing Chinese Demand

Global miner Rio Tinto warned on Wednesday of slowing Chinese demand for commodities because of the world financial crisis and signalled a possible delay in plans to sell $10 billion in assets.

Rio, which had planned to sell non-core assets by year-end, also reported a 30 percent slide in refined copper production for its third quarter, from a year earlier, said lower ore grades at its part-owned Escondida operation had also hit mine production.

It said iron ore output rose 17 percent in the quarter.

"In the near term, the Chinese economy is pausing for breath," Rio Chief Executive Tom Albanese said in a statement.

"China is not completely insulated from an OECD recession and we will see an impact on Chinese exports," Albanese said.

The company said its financial position remained strong and its overall outlook was still positive but, given challenging financial markets, it was reviewing its timeline for the first $10 billion in promised divestments in 2008.

The sales are aimed at helping Rio recoup some of the $39 billion it paid for aluminium group Alcan in 2007.

All up, Rio has earmarked about $15 billion in sales tied to the Alcan purchase, mostly in packaging, engineering and exploration sectors.

Aluminium production in the third quarter jumped 371 percent, boosted by Alcan's contribution.

Watch Tom Albanese's CNBC interview here >>>

Copyright 2008 Reuters. Click for restrictions.