Rio shares plummet as BHP pulls deal

Shares in Rio Tinto have slumped more than 35 per cent in the wake of BHP Billiton's shock move to abandon its takeover proposal for its rival.

Following a slight hiatus for an adjustment, Rio's share price fell $22.41 to $41.49 at 11:23 AEDT.

The share price plummet follows a 40 per cent plunge on Rio's shares in early trading in London yesterday.

Meanwhile shares in BHP gained 7.7 per cent or $2.02 to $28.24.

Yesterday, BHP released a string of announcements including a $US2.1 billion writedown of its Ravensthorpe and Yabulu nickel assets and the approval for its $US4.8 billion Rapid Growth Project 5, which will increase iron ore output in the Pilbara by 50 million tonnes to 205mt per annum.