Further doubt has been cast on Rio Tinto's intention to approve the last USD 5 billion it still needs to commit to finish its planned West Australian iron ore expansion.

New Rio iron ore boss Mr Andrew Harding, who axed up to 50 management positions from the Perth based business previously run by current Rio chief Mr Sam Walsh has declared he is reshaping the still expanding business to deal with a new paradigm.

Mr Harding said that changes would include constraint on capital as well as costs as the iron ore business changed from a rapid growth phase to one focused on consolidation. This was necessary to ensure we can properly respond to volatile global economic conditions with a long term trend of declining GDP growth rates and a rebalance of iron ore supply and demand.

The substantial middle-management cuts and stressing of capital constraints come a month after Mr Walsh told a Barcelona conference that Rio's iron ore division had the flexibility to adjust its expansion profile to reflect the company's financial position or the state of markets.

Rio has approved spending to boost its Pilbara production to 290 million tonnes a year and its port and rail infrastructure capacity to 360 million tonnes by the H1 of 2015. But building mines to fill the expanded infrastructure requires about USD 5 billion in expenditure.

Mr Walsh has said that Rio has a number of options to do so leading to speculation the company will delay spending as it conserves capital and as faith in iron ore demand growth wavers. Rio may not reach 360 million tonnes a year of production until 2018.