Mr Jan du Plessis chairman of Rio Tinto Plc has warned shareholders that world markets remain fragile, despite many economies having recovered from the financial crisis. However the mining giant had enjoyed an outstanding 2010 with record underlying earnings and was well placed for growth as emerging markets urbanize.
He said that as far as the near-term outlook for the business is concerned, world financial markets remain fragile.
Mr du Plessis said that a government fiscal and monetary stimulus program had assisted Rio Tinto as world trade recovered, leading to increased demand for commodities and higher prices.
Mr Tom Albanese CEO of Rio Tinto said that the company would benefit from a tight market for iron ore which accounts for about 70% of its earnings, in the short to medium term. The company is also a major copper producer, with earnings increasing by 35% in 2010 and electrification and growth in China and India growing.
He said that to put this in context, over the next 30 years it is projected that the world will consume as much copper as it has over the last 10,000 years. Financing was no longer the prime issue with Rio facing more difficult challenges competing for human resources due to a skills shortage and mineral resources.
He added that Rio Tinto has had a mixed week with floods and cyclones contributing to a worse than expected 16 per cent drop in iron ore production from the record set in the December quarter. That came less than a week after it acquired control of Riversdale Mining delivering it a tier-one coking coal project in Africa.
Persistent economic and financial imbalances continue to pose risks. Recent uncertainty in the markets, turmoil in the Middle East, problems within the Euro zone and other recent incidents are all bearing out this view.