Tananarive, Madagascar — MININGREVIEW.COM — 03 November 2008 – CEO Tom Albanese of the Rio Tinto Group – one of the world’s leading mining and exploration companies – says the slowdown in Chinese economic growth is quickening, and demand from the world’s largest user of metals will not rebound until 2009.
“It is decelerating more in the fourth quarter than we saw in the third quarter,” he added in an interview with Bloomberg News at the company’s ilmenite mine in Madagascar. “That is going to lead to a deferred pickup in cumulative demand for most of the things we produce during the course of 2009.”
Rio Tinto is among the mining companies reviewing investment plans in the wake of the plunge in commodity prices amid signs of a global economic slowdown. The London-based company – in the process of fending off a US$76.8 billion (R806 billion) hostile takeover bid from BHP Billiton Limited – is planning to spend more than U$9 billion (R95 billion) on new mines and expansions next year.
“We want to tailor our expected delivery of those projects with when we see demand picking up,” Albanese said. “We’ll prioritise spending towards the most robust projects.”
He went on to explain that projects that are almost complete will start production, while those at an early stage and without financial commitments “will have to be given some latitude on the timing.”
Bloomberg reports that copper – which accounted for 22% of Rio Tinto’s sales in the first half – has fallen 44% in the past two months, while aluminum has declined 24%.