Shares in Rio Tinto crashed 35% today after the year-long attempt to create a titan of the global economy through a merger with fellow mining giant BHP Billiton was aborted.

More than a year after BHP Billiton unveiled its audacious plan for a merger at the time worth £170 billion, the Australian group admitted defeat amid the wreckage of crashed stock prices after the bursting of the commodities bubble.

The architect of the deal Marius Kloppers, chief executive of BHP Billiton, said: "We have previously said that similar cultures and the overlap of key assets and infrastructure make this a compelling combination. Recent global events and associated falls in commodity prices have, however, altered risk dimensions.

"The greater debt exposure of the combination plus the difficulty of divesting assets have increased the risks to shareholder value to an unacceptable level."

The two companies combined would have created the world's biggest copper miner.

Over the past 12 months, the price of copper has nearly halved. In the past month alone it has crashed 23%.

From their highs earlier this year BHP Billiton shares have nearly halved. Rio Tinto shares had already fallen by nearly two thirds and collapsed by another 875p to 1575p today.

While the US and Australian competition authorities had cleared the merger, it is understood the European Commission was unlikely to wave the deal through without forced sales of parts of the business.

The merged company would have been in control of more than a third of the world's iron ore production, 14% of global coal production, the world's largest producer of aluminium, the second-largest uranium producer and with important roles in the markets for diamonds, silver, nickel and lead. It is thought Brussels would have demanded disposals in iron ore and coal - key commodities in the world's steel industry.

In a statement, BHP Billiton said: "Given the current economic circumstances and uncertainty regarding our ability to achieve fair divestment values in the required timeframes, these remedies would contribute to the cost and risk of the transaction."