Rio Tinto, the global mining company which planned a controversial nickel sulfide mine in the Upper Peninsula northwest of Marquette, announced today that it will defer development of the same mine until market conditions improve. 

“The Group has responded decisively to markedly weaker demand conditions in its major markets by reducing capital and operating costs, and adjusting capacity where appropriate,” chairman Paul Skinner said in a statement, “The Group will make sufficient investment to maintain its growth options, in order to be well positioned for a recovery in global economic activity.”

Rio Tinto planned to spend $300 million developing the mine through its subsidiary Kennecott Eagle Minerals and expected to begin production in late 2009.

The company was the first to be issued permits under Michigan’s 2004 non-ferrous metallic mining law. These permits are being challenged in lawsuits by groups that argue the planned mining could damage the watershed.

A $19.5 billion dollar investment in Rio Tinto by the Chinese state-owned aluminum company, Chinalco, was also announced today.