Among other Australian miners, Newcrest Mining Ltd. climbed 1.1%, while Fortescue Metals Group Ltd. rose 5.2%.
In Fortescue's favour, it raised equity and debt in 2006, and more money last year.
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Unlike Fortescue, Rio Tinto's survival was not in doubt, but it faced an extraordinarily difficult refinancing.
The Chinese deal with Fortescue may be more than a counter-attack against Rio and BHP.
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If Fortescue's production costs exceed the spot price, it would hardly be the only Australian commodities firm in trouble.
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However, Fortescue said that it expected demand from China to pick up and provide a boost to iron ore prices.
How much it will cost Fortescue to produce a tonne of ore is the source of much debate in Australia's mining community.
ECONOMIST: Fortunes in the mining business come and go faster than ever
But Fortescue said this would make it financing two major investments impossible.
Major mining companies including, Vale , BHP Billiton, Fortescue Metals Group, among others have lowered or plan to lower their spending for 2013-2014.
Jiangxi Copper rose 1.7% in Hong Kong and 1.9% in Shanghai, while in Sydney, Fortescue Metals Group and BHP Billiton advanced 3.8% and 0.7%, respectively.
Fortescue had many times denied having had similar conversations with Chinese companies, even as it became increasingly clear that without a deal, it was imperilled.
He added that Fortescue may have other reasons for shelving projects.
But Fortescue, which is part-owned by Chinese state mining firms, said the tax would hit profits before financing costs, leaving it less room to repay debts.
Under the terms of the old agreement, Fortescue was restricted from paying dividends or expanding its operations beyond its Chichester Hub during the 10-year life of the notes.
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On October 28th Fortescue reversed its long-standing public optimism and announced it would curtail expansion, a huge blow given the importance of scale in efficient mining of iron ore.
ECONOMIST: Fortunes in the mining business come and go faster than ever
Tuesday's move by Alcoa follows Monday's decision by Australian iron ore miners Rio Tinto and Fortescue Metals Group to cut their annual production by 10.0% due to weakening demand from China.
Supply from the big three, plus Fortescue and Anglo American, has grown by 7.4% in the first half of 2012 compared with the first half of 2011, according to JPMorgan Chase.
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