Rio Tinto Comments
Europe crisis overcooked and real economy is doing fine
Friday, 14 Oct, 2011
It is reported that Rio Tinto the world second largest mining group believes concerns arising from the European debt crisis
that have shaken world markets do not reflect the real economy' as demand for iron ore and coal remains strong.
Mr Tom Albanese of Rio Tinto said ''My sense is that the expectations are actually more gloomy than what is taking place on
the ground. He said that from what I'm seeing, the actual real economy is probably doing better than the financial markets are
worrying about.''
An index of six metals on the London Metal Exchange has dropped 18 per cent this half year on signs economic growth is
slowing in the US and as speculation grows the European debt crisis is spreading
Mr Jean-Claude Trichet president of the European Central Bank said Europe debt crisis threatened the region's financial
system. Officials are racing to put together a new plan to end the turmoil.
Mr Albanese said in the interview in Seoul that ''The risks and the questions around Greece and the questions around
contagion beyond Greece are probably having a further dampening on sentiment. I would just hope that the leaders,
particularly in Europe, who are dealing immediately with the debt crisis in Greece, recognise that they themselves can
influence expectations.''
Mr Albanese said last month that commodity markets were ''somewhat weaker than six months earlier in expectation that
concerns over the health of developed economies would curb demand. Rio's order books were full and pricing was strong, he
said at the time.
He said that ''Since I made those comments in September, we haven't seen that much of a change in sentiment or our
underlying businesses. What we've been seeing in our business is that the general economy is going OK, even in the US.''
The company last month maintained a long term forecast for demand for copper, aluminum and iron ore to double over 15 to
20 years. Rio has approved spending of USD 27 billion on expansion and new mines and is studying an extra USD 35 billion
of investment.
(Sourced from www.theage.com.au)