SYDNEY — — Rio Tinto Group will cut 14,000 jobs worldwide and reduce capital spending as part of new measures to reduce its debt amid waning demand for iron ore and other metals, the mining company said Wednesday.

The job cuts — accounting for 12.5 per cent of the company's 112,000-person work force — and reduction in operating expenditure are expected to save at least $1.6-billion (U.S.) a year by 2010, the London-based company said in a statement.

Rio Tinto also said it will try to sell “significant assets” that were not previously listed for sale in order to reach its goal of trimming $6.6-billion from its debt by the end of next year.

“Given the difficult and uncertain economic conditions, and the unprecedented rate of deterioration of our markets, our imperative is to maximize cash generation and pay down debt,” chief executive Tom Albanese said in the statement. “We have undertaken a thorough review of all our operations and are executing a range of actions.”

“By taking these tough decisions now we will be well positioned when the recovery comes,” Mr. Albanese said.

Rio Tinto's debt was a key factor in rival BHP Billiton withdrawing its hostile takeover bid last month in the midst of the global economic downturn. Much of that debt is from its $38.1-billion acquisition of Canadian company Alcan last year.

Other mining companies would likely take similar measures in response to reduced demand, said John Meyer, an analyst at Fairfax IS investment bank in London. The booming demand in recent years led to expansion and job growth for many mining companies that is no longer sustainable, he said.

“The scale of the cuts looks dramatic but we would expect to see this across the industry,” he said. “Companies have expanded in recent years in response to high metals prices, but that's over now. With the recent severe falls in demand, and the recent (economic) climate, we can see mining companies pulling back markedly.”

Rio Tinto spokesman Ian Head said there were no details yet on where, when or how the staff cuts would come.

“We're working our way through the implications of this,” Mr. Head said. “We don't expect to know more until some time in the first quarter of next year.”

Weekend reports suggested it may halt proposed aluminum and iron ore projects in Canada. Major projects planned or that are in the works in Canada is an expansion of an aluminum smelter in Kitimat, B.C. and an expansion of a smelter in the Quebec community of Saguenay.

Rio Tinto has offices in 40 countries, with most of its employees in Australia and North America, as well as significant operations in South America and southern Africa. It employs 97,000 people directly in addition to 15,000 contractors, or people on short-term contracts. The job cuts will mostly be on the contractor side, where 8,500 positions will be eliminated.

The world's second-largest aluminum producer stressed it remains committed to its strategy of finding, developing and operating large, long life, low cost mining assets.

The company currently expects its global iron ore production and shipments for fiscal 2009 to be around 200 million metric tons. Aluminum production is forecast at 200,000 tons and copper production at 830,000 tons.

Rio Tinto is counting on the further industrialization of countries such as China and India to support higher levels of demand for metals and minerals.

In London, Rio shares were up 145 pence, or 11.5 per cent, to 14.03 pounds. In Sydney, where trading ended before the announcement, its stock rose 12.14 per cent.