ASUNCION, Dec 10 (Reuters) - Giant global mining company Rio Tinto said on Tuesday it postponed studies related to a proposed $4 billion aluminum plant in Paraguay due to bad market conditions, putting what would be the country’s biggest-ever foreign investment in jeopardy.
The plant would have been Rio Tinto’s largest worldwide, with the capacity to produce 674,000 tons a year. It had been scheduled to start operating in 2016.
“This was a difficult decision to make, given that we have very much enjoyed the professionalism and collaboration of the Paraguayan authorities,” the company’s Canadian subsidiary Rio Tinto Alcan said in a statement. “Having said that, we cannot avoid the reality of current market conditions.”
Finance minister German Rojas told Reuters that the decision was driven by the company’s need to cut costs in the face of fragile world commodity prices, aluminum prices in particular.
“It would have been worse if the project had advanced further before having to be abandoned,” Rojas said.