Rumours have been circling that Rio has been mulling over the possibility of raising up to $6 billion in equity.

In its response to recent press speculation, Rio said it continues to consider a range of options to cut its debt, including the issuing of equity.

“In order to preserve maximum flexibility for the group, the boards do not rule out the potential to issue equity as one of the options it has available, if it is determined to be in the best interest of shareholders,” Rio said.

The company said other options available to it included reducing capital expenditure and operating expenditure, cutting its workforce and expanding the scope of assets targeted for divestment.

“No decision on which options will be pursued has yet been taken, and further announcements will be made as and when appropriate,” Rio added.

Last month, Rio announced it would slash 14,000 jobs and cut 2009 net capital expenditure guidance by $5 billion in a bid to reduce its net debt by $10 billion by the end of this year.

The bulk of Rio’s debt was taken on when Rio snapped up Canadian aluminium maker Alcan for $US38.1 billion last year.

Shares in Rio have slipped $1.57 to $40.62 in early afternoon trade.