Rio Tinto wary of 'ongoing disruption' to world economy

26th May 2010, Comments 0 comments

Anglo-Australian miner Rio Tinto Wednesday warned of the risk of "ongoing disruption" to the global economy but said it remained confident of long-term Asian demand for its raw materials.

Chairman Jan du Plessis said the company was cautious about the near-term economic outlook, citing volatility caused by Europe's debt problems and inflationary pressures in Asia.

"Asian countries are having to contend with inflationary risks arising from the massive economic stimulus packages that were put in place last year," he told the company's annual general meeting.

"At the same time, we have seen the recent sovereign debt crisis in Europe and its sweeping contagion into financial markets around the world.

"This illustrates the potential for persistent economic imbalances and hidden risks to cause ongoing disruption to global economic activity."

But du Plessis said China's demand for iron ore, copper, coal and aluminium was expected to continue to grow over the next 15 years, at which point higher demand from India was expected.

"The long-term outlook therefore continues to make our business an attractive proposition," he said.

Executives from Rio Tinto, one of the world's biggest miners, also repeated their attacks on Australia's proposed 40-percent tax on "super profits" enjoyed by resources companies.

Du Plessis accused the government of a "scandalous" misrepresentation of the issue.

"Applying this tax retrospectively is a dangerous prospect and has the potential to destroy Australia's hitherto excellent reputation in the global community," he said.

© 2010 AFP

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