Rio Tinto Ltd, the world's second largest iron ore producer, has postponed a $3 billion expansion to its Corumba iron ore mine in Brazil amid the global economic downturn.
The $US2.15 billion ($A3.07 billion) expansion, flagged in July, would have increased the annual capacity of the mine from 2.4 million tonnes to 12.8 million tonnes from the fourth quarter of 2010.
"It is in response to the severe market downturn, which has clearly impacted on our iron ore demand," Rio Tinto spokesman Gervase Greene told AAP.
"It is important to note that we retain the option to pursue that expansion when credible signs of the market recovery are seen, but until such time, we have postponed it."
Rio Tinto is undertaking a range of measures including, job cuts and the postponement of capital expenditure in response to the global economic downturn.
Engineering group Ausenco Ltd, which was contracted to provide services to the expansion, expects its 2009 revenue to fall by up to three per cent after the postponement.
Ausenco said the expansion was estimated to represent six per cent of the company's projected 2009 revenue and seven per cent of estimated revenue in 2010.
The company, however, said there would be less than a three per cent net impact on its projected 2009 revenue after recently winning two additional engineering contracts.
"Ausenco's strength lies in our diversified services across the minerals, infrastructure, energy and oil and gas sectors," chief executive Zimi Meka said in a statement.
"This diversification and our expansion into new geographic markets, particularly South America, are providing a buffer in the current challenging market and industry environment."
Ausenco shares lost 21 cents, or 8.54 per cent to $2.25 by 1157 AEDT, while Rio Tinto fell $2.43 to $41.50.
