LONDON (Commodity Online): China is the biggest power house for all the mining companies in the world now. With the liberalization of the gold market, more and more mining companies are now focusing on China market.
Recently, mining giant Rio Tinto announced that its profit doubled in the first half of the year due to the demand from China.
The miner beat market expectations to deliver pretax profits of £5.56billion in the first six months, compared with £2.24billion this time last year. Rio's performance was largely driven by continued strong demand from China's booming economy, which helped swell revenues to £16.85billion from £12.3billion.
Chief executive Tom Albanese said the barnstorming growth in Asia's developing economies would remain the engine room of Rio's earnings.
Rio has also reaped the benefit of rising prices for the metals it mines, which added £2.4billion to the firm's coffers this year. Iron ore prices rose on the back of a new global pricing system, bringing in some £2.6billion in profit for Rio.
Copper prices jumped by some 78 per cent, while gold rose by 26 per cent and demand for rough diamonds increased as the world emerged from the depths of the recession. Chairman Jan du Plessis hailed a reduction in net debt - down from £24.5billion to £7.5billion - which he said would enable Rio to withstand 'further shocks' to the global economy.
The firm expects to reward shareholders with a full-year dividend at least as high as last year's offering of around 56p per share, after doling out an interim payout of about 28p. Rio's stellar profits echoed the performance of rivals Fresnillo and Anglo-American this week, but one miner has proved the exception to the rule.
Randgold Resources, which mines gold in West Africa, said second-quarter profits doubled, but when stripping out the positive impact of rising gold prices, earnings were largely flat at £16.5million.
The company (down 320p at 5,395p) also warned that annual output could undershoot its 447,000-ounce target by as much as 5 per cent, due in part to persistent power cuts at its Loulo mine in Mali.