HomeBase MetalsGlobal financial crisis expected to move into 2009

Global financial crisis expected to move into 2009

Paul Skinner,
Rio Tinto
Melbourne, Australia — MININGREVIEW.COM — 24 November 2008 – The London-based Rio Tinto group – the world’s third-largest mining company – says it expects the global financial crisis to extend into 2009, when it believes China’s metal demand could start to rebound.

Addressing a luncheon here today, Rio Tinto chairman Paul Skinner said: “Once the Chinese economy starts to pick up movement again, we will see a resurgence of very strong demand for commodities to fuel that economic growth.” He added that China’s growth this quarter would be likely to slow from the third quarter.

Rio Tinto CEO Tom Albanese said earlier this month that the slowdown in Chinese demand would be short, forecasting a rebound next year. Two weeks ago, China – the world’s biggest buyer of metals – pledged a US$586 billion (R6 153 billion) stimulus package to prop up growth as the world slipped deeper into recession.

“We expect to see some fruits of that in 2009,” Skinner said today. “China will remain the main driver of mineral demand. I do not think that what we are seeing in terms of this downturn is the beginning of something very deep.”

Bloomberg News reports that Rio Tinto – battling a hostile US$55 billion (R580 billion) takeover from BHP Billiton Limited –  cut its 2008 iron ore output target by 10%, after saying that it might delay US$10 billion (R105 billion) of asset sales, and that it would review project spending.

“Rio Tinto is well-placed to weather the crisis and retained its forecast for metal demand to double by 2020,” Skinner concluded.