[miningmx.com] — RIO Tinto told investors on Tuesday that it was well-placed to weather turbulence in financial markets and continued to expect long-term demand growth, but it warned of challenges to the supply side including equipment shortages.
“Our order books are full and pricing is strong, but it is noticeable that markets are somewheat weaker than they were six months ago,” Rio Chief Executive Tom Albanese said in a statement ahead of a seminar for investors.
Miners across the board have warned of barriers to the expansion of supply as companies, particularly at the smaller end of the scale, are hit by funding and other constraints.
“Permitting delays, labour and equipment shortages and technically challenging ore bodies are all contributing factors,” he said.
Rio said it was optimistic about global commodity demand growth over the next two decades and said that while it saw evidence of destocking in China and slowing growth rates, a policy-induced hard-landing remained “unlikely this year”.
Rio is expecting to boost production of copper after 2011 as grades improve and it begins commercial production from its Oyu Tolgoi project in 2013.
The miner said on Tuesday that it had increased resources at its Kennecott Utah Copper Bingham Canyon Mine.
New technology would also allow it to boost copper production, Rio said, with developments including a new tunnel-boring system to be piloted at the end of next year.
Copper is Rio’s second-largest contributor to profit after iron ore.
Rio said Australian coal, where production was battered along with other miners by bad weather at the start of the year, has largely recovered from the floods and is ramping up to a compound annual growth rate of over six percent to 2015.
The miner also said over $4bn of its $7bn share buy-back programme had been completed.
