Rio to review Maaden $10.6 bln aluminium jv-CEO

DUBAI/RIYADH, Nov 10 (Reuters) - Rio Tinto Alcan said on Monday it will review a $10.6 billion aluminium joint venture with Saudi firm Maaden, and sources close to the project said it could be delayed by 1-2 years. "We are looking at the technical and financial feasibility of all our projects, this is not unique to Maaden," Dick Evans told Reuters at an industry conference in Dubai. "The current global financial markets merit a pause to re-look at the long term planning for these projects to see how we can optimise them," Evans said. A source working on the 740,000-tonne-per-year smelter project said before Evans made his remarks that Maaden would still push it through with or without its partner should Rio decide to drop it. A Maaden executive could not confirm if Rio Tinto is considering abandoning the plan and Piers Taylor, a Maaden spokesman, could not immediately comment. A Khobar-based executive overseeing Maaden's aluminium project told Reuters on condition of anonymity that the project could be delayed by up to two years now that market conditions have changed. "The board will decide within three weeks or before the end of this year at the latest if we should go for a one-year delay or two years," he said. "The short- and medium-term situations both in the financial world and in the aluminium market call for greater caution on a project of this size." But, there is no doubt on the long-term viability of the project, he added. OIL RELIANCE Maaden is investing 60 billion riyals in ($16 billion) projects including phosphate, bauxite, gold and industrial minerals. The investments are a crucial part of government plans to diversify an economy heavily reliant on oil exports income. Maaden Chief Executive Abdullah Dabbagh said in October all his company's projects will be reviewed because of the impact of the financial crisis but declined to give a time frame for decisions on the aluminium plant. Maaden said in July the venture was still viable despite a 40 percent increase in costs. Dabbagh was quoted as saying in August the group planned to borrow as much as $8 billion in the third quarter of next year to finance the project. Last month, Rio's Evans said the firm is planning to defer some growth projects and look for acquisition opportunities thrown up by the current market turmoil. Evans said Alcan, one of the world's two biggest aluminium producers along with Russia's UC Rusal, was expected to see flat to slightly higher overall production in 2009. Alcan had previously released a growth plan of new projects to boost output to around 7 million tonnes per year from current levels of around 4 million. Rio Tinto has said it had put on hold its aluminium smelter project in neighbouring Abu Dhabi, pending a review by the Gulf emirate's government of its energy requirements.