Mining giant Rio Tinto said today it planned to axe 14,000 jobs as part of its response to weakening global demand.

The group, which has major iron ore operations in Australia and employs more than 1,000 people in the UK, expects to reduce annual operating costs by at least 2.5 billion US dollars (£1.7 billion) in 2010. It is looking to slash 10 billion US dollars (£6.75 billion) from its debts of 38.9 billion US dollars (£26.2 billion) by the end of next year.

Rio said the measures reflected the "unprecedented rapidity and severity" of the global economic downturn, which has caused sharp falls in commodity prices.

The company said contractors made up 8,500 of the 14,000 jobs due to be affected. It did not provide details on locations for the cuts.

Rio has smelting operations at Anglesey and at former Alcan sites at Lynemouth in Northumberland, and Lochaber in the Scottish Highlands. The group became the world's biggest aluminium company following the acquisition of Alcan last year.

The company, which employs 97,000 people, said an office with 50 staff in the City of London will be consolidated into its Paddington head office, where 500 are employed.

BHP Billiton abandoned an offer for Rio Tinto last month because of deteriorating economic conditions.

Rio's chief executive Tom Albanese said the company's focus in the current climate was on maximising cash generation and paying down debt.

He added: "We will minimise our operating and capital costs to appropriately low levels until we see credible and meaningful signs of a recovery in our markets, but will retain our strategic growth options."

Rio said it planned to hold its 2008 dividend at last year's level, while it will also consider the sale of assets not previously targeted for divestment.

Shares in Rio were 10 per cent higher following today's announcement.