UPDATE 1-Rio Tinto wary on China growth, speeds up cost cuts

* Rio cautious on impact of China stimulus

* Sees high cost Chinese production shutting down

* Optimistic on China power supply for Mongolia copper mine

* Sees 13 pct growth in copper output from 2011 to 2015

(Recasts, adds details)

LONDON, Oct 9 (Reuters) - Global miner Rio Tinto cutits growth forecast for China and said it was stepping upefforts to cut costs, having already slashed $500 million, facedwith an uncertain global outlook.

Rio Tinto, the world's second-largest iron ore miner withmore than 80 percent of its earnings in 2012 expected to comefrom the material, is heavily dependent on Chinese steel demandpicking up and is counting on Chinese infrastructure spendingplans to drive that demand.

"Significant stimulus efforts have been announced in China,the U.S. and Europe, but it's uncertain exactly when we will seethe impact of these on our markets," Rio Tinto Chief ExecutiveTom Albanese said on Tuesday.

"Given this, and the considerable price fluctuations inrecent times, we are somewhat more cautious on the outlook overthe next few quarters."

Rio Tinto cut its forecast for Chinese economic growth tojust below 8 percent, from 8 percent previously, in line withthe International Monetary Fund's revised forecast on Tuesday.

"Economic growth in China is robust but moderating, and isslow and uneven in developed economies," Rio said in astatement.

Iron ore prices slumped 42 percent from a high in April to athree-year low of $87 a tonne last month. While they haverebounded to $110, prices remain well below a perceived floor at$120, the point at which high cost Chinese producers would losemoney.

Rio estimated around 100 million tonnes of Chinese iron oreproduction had become unprofitable and said it "sees evidence onthe ground that a large proportion of this has already beencurtailed."

The comments came ahead of a briefing on the company'scopper business, which has a brighter near term outlook,although it flagged its newest project, the massive Oyu Tolgoicopper and gold mine in Mongolia, may be delayed due toprolonged talks with China over power supply to the mine.

The company has previously said it was on track to startcommercial production at Oyu Tolgoi in the first half of 2013,but on Tuesday that target was missing in Rio Tinto's comments.

It said it remained "optimistic" it would reach a powersupply deal with China. Once that is signed, first ore would beprocessed within six weeks, first concentrate production wouldstart a month later, with commercial production to begin threeto five months after that.

It expects copper production across the group to increasefrom 2013 thanks to improving grades at existing mines and thestart of production at Oyu Tolgoi, forecasting a cumulativeannual growth rate of 13 percent from 2011 to 2015.

Rio said it has cut $500 million in costs so far in serviceand support roles, and would now target cost cuts in operations,project studies and sustaining capital, predicting that capitalspending, forecast at $16 billion this year, would peak in 2012.

"We aim to maintain our single A credit rating and aredriving our cost reduction efforts harder and faster," Albanesesaid.

Rio Tinto's comments came after rival BHP Billiton

confirmed earlier on Tuesday that it istargeting job cuts in its iron ore business, its most profitablearm, adding to mining job losses around Australia.

(Reporting by Clara Ferreira-Marques; Additional reporting bySonali Paul in MELBOURNE; Editing by Kate Holton and Ed Davies)

((clara.ferreira-marques@thomsonreuters.com)(+44 207 5423214)(Reuters Messaging:clara.ferreira-marques.thomsonreuters.com@reuters.net))

Keywords: RIO TINTO/