Rio Tinto is divesting its stake in the Pebble mine prospect in south-west Alaska by donating its shares to two Alaskan charitable foundations.
The Pebble project is located in the Bristol Bay region in south-west Alaska, about 200 miles from Anchorage.
Rio Tinto holds 19% equity in Pebble mine, which is a greenfield project based on a copper-gold-molybdenum porphyry deposit.
The mine's development caused controversy over fears the project could endanger salmon and other fisheries in the Bristol Bay region.
Natural Resources Defense Council western director Joel Reynolds said that Rio Tinto's donation of its interest in the Pebble Mine to local charities is the latest major blow to the project and good news for the people of Bristol Bay.
"By abandoning its 19.1% interest in the Pebble mine, the company has confirmed that the risks of the project are too great and the opposition of the region's residents too strong," Reynolds said.
Last September, Anglo-American moved out of the project leaving an investment of $540m, and had previously Mitsubishi sold its 9% interest in 2011, citing a re-evaluation of its copper assets.
Pebble mine is one of the largest copper discoveries in the world, although the ore body contains less than 1% copper by volume.
"Rio Tinto's decision is the latest demonstration that the Pebble mine is economically and environmentally infeasible, even for the largest mining companies in the world," Reynolds added.
"The company's decision to divest is a vindication of its stated commitment to sustainability in the region and the health, safety and cultural heritage of the people of Bristol Bay, and its withdrawal serves the interests of the company's shareholders."