Iron ore booming: Rio CEO

Source: Global Times
[08:35 February 14 2011]
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Rio Tinto chief Tom Albanese said Australian iron ore was the firm's top growth priority, with demand set to outstrip supply of the precious steel-making metal until at least 2013.

The Anglo-Australian mining giant this week revealed it had almost tripled net profit to $14.32 billion as commodity prices skyrocketed on strong demand, saying it would hand $5 billion back to shareholders.

The market had been "pleasantly surprised" by the share buyback but Albanese added that Rio's prospects were strong, with global growth "higher than we would've expected" and a "good long-term picture."

Albanese Sunday said the "very strong" iron ore prices were better than he would have anticipated 12 months ago, "with certainly a demand that's continuing to be well in excess of what the supply is."

"Realistically, if we look over the next year or two it's hard to find big new areas of supply globally, particularly in 2011," he told ABC television.

"But as 2013, 2014, 2015 start winding in, you're going to see a lot of new iron ore coming in the market and it's probably going to put the market closer in balance than we would see right now," he added.

Rio's "number one growth priority over the next five years" would be expanding its Pilbara iron ore operations in western Australia, he said, with two thirds of the $12 billion in investments announced in the past 12 months targeting that project.

Rio's second priority was to boost its copper business, Albanese said, with opportunities in North and South America along with its massive Oyu Tolgoi project in Mongolia, tipped to produce 450,000 tons of copper over 35 years.

AFP