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Rio sees strong ongoing demand for iron ore

Rio Tinto iron
ore stockpiles in
Seoul, Korea — MININGREVIEW.COM — 11 November 2010 – Global miner Rio Tinto says it sees the strong demand for iron ore continuing into next year, and adds that the current system of pricing the steelmaking ingredient on a quarterly basis is working well.

“Demand is going to continue to be strong next year. We’ll continue to see a robust growth,” Rio Tinto iron ore chief executive Sam Walsh told Reuters on the sidelines of the G20 CEO Summit here.

Last month, the world’s No.2 iron ore producer approved a US$3.1 billion (R21.4 billion) iron ore expansion, staking a claim that it would become the world’s top producer and defying industry concerns over a new Australian mining tax.

Rio Tinto, BHP Billiton and London-listed Xstrata “’ the big three of Australian iron ore and coal “’ accuse Canberra of reneging on a guarantee to refund all of the money the miners pay state governments in the form of royalties, media reports said. Without that guarantee, they could effectively be double-taxed.

Walsh said he believed the government would credit back all state royalties to miners under the proposed minerals resources tax.

“That is the indication that we had from senior people within the government. And the heads of agreement signed with the prime minister of Australia was that all state and territorial royalties would be creditable against resources tax. That is what we expect,” he added.

Walsh also said miners and steel makers were working to improve the newly introduced quarterly pricing system of iron ore, but he believed the shift from the annually fixed benchmark scheme worked very well.