SYDNEY, Australia (AP) -- Aluminum producer Alcoa Inc. on Tuesday suspended its expansion of the Wagerup alumina refinery in Western Australia state and slashed its metal production as demand weakens due to the global credit crisis.
The move by U.S.-based Alcoa follows Monday's decisions by Australian iron ore miners Rio Tinto Ltd. and Fortescue Metals Group Ltd. to cut their annual production by 10 percent due to weakening demand from China.
The 2.2 million ton (2 million metric ton) expansion of the Wagerup refinery was expected to cost between $3 billion and $4 billion.
Alcoa of Australia Managing Director Alan Cransberg said the company had been forced to reconsider the timing of capital projects due to "unprecedented" economic challenges.
"When market conditions improve, we will revisit implementation of the project," Cransberg said in a statement.
Alcoa said it would also immediately cut aluminium production by 386,000 tons (350,000 metric tons) per year, on top of the 292,000 tons (265,000 metric tons) in cuts the company previously announced. In total, the reductions represent 15 percent of the company's annual output.