Global Biz

Rio Tinto chairman warns global economy remains weak

(Xinhua)
Updated: 2011-05-05 13:39

SYDNEY - Rio Tinto is running strongly and benefiting from favourable but volatile markets for its products, the head of the Australian mining company said on Thursday.

Related readings: Rio Tinto close to control of Riversdale Mining

Rio Tinto Chief Executive Tom Albanese said the company's stronger balance sheet after a 11 billion U.S. dollars divestment program in 2010 positioned it well to invest in many first-class growth projects and to better deal with any future market shocks.

However, Rio Tinto Chairman Jan du Plessis has warned that global economies remain fragile.

"As far as the near-term outlook for the business is concerned, world financial markets remain fragile. Persistent economic and financial imbalances continue to pose risks," du Plessis told shareholders at the group's Australian annual general meeting in Perth on Thursday.

"However, our pursuit of operational excellence and our strong balance sheet put us in a positive position to weather this short term volatility."

He said the company was well placed to supply an increase in demand for metals and minerals as populous nations continue to industrialise and urbanise.

A significant improvement in demand for commodities had put upward pressure on prices to create a favourable market that allowed Rio Tinto to reduce its net debt to 4.3 billion AU dollars ($4.6 billion) by the end of December, the company's chairman said.

He said Rio Tinto's prudent balance sheet management had restored the company's control over its available choices.

The company has amassed a 73 percent stake in Australian coal miner Riversdale Mining Ltd and hopes India's Tata Steel, which holds the remaining interest in Riversdale, will soon accept its $3.9 billion bid.