Rio Tinto more confident on commodities outlook

By IBTimes Staff Reporter | April 19 2012 7:08 AM

Global miner Rio Tinto said it was more upbeat about the outlook for commodities as demand from China remained robust and the U.S. was recovering.

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Overall, we are somewhat more confident than six months ago, chairman Jan du Plessis told a shareholders meeting on Thursday. The world continues to face considerable uncertainty and we believe this will contribute to ongoing volatility.

In February, when Rio reported full-year results, it was cautious about near-term prospects due to uncertainty in financial markets, especially regarding Europe.

The potential for contagion from the European debt crisis continued to linger, but this was balanced by promising signs of recovery in the United States, du Plessis said.

China is not growing at the same rate as we have seen in recent years, but the rate of growth is still very favourable in comparison to global economic growth, he said.

Over the longer term, we continue to believe the outlook remains strong with demand for many of the products we produce expected to double over the next 20 years.

On Tuesday, Rio reported worse-than-expected falls in first quarter iron ore, copper and coal production after it was hit by bad weather.

On Wednesday, Rio agreed a financing deal with Ivanhoe Mines Ltd to develop the $13.2 billion Oyu Tolgoi copper-gold project in Mongolia.

(Reporting by Eric Onstad; editing by Jason Neely and Elaine Hardcastle)