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This post was edited by Chechen at 2012-1-28 23:54|
Rio, Anglo CEOs See China Economic Resilience in Face of Euro Contraction
By Jesse Riseborough and Carli Lourens Jan 27, 2012 7:57 AM
China’s economic growth will remainresilient to a contraction in Europe and underpin longer-termgrowth in demand for raw materials, according to the heads of[url=http://www.bloomberg.com/apps/quote?ticker=RION]Rio Tinto Group (RIO)[/url] and Anglo American Plc.
“For the next year, so as long as China is in this soft-landing mode we’ll be OK,” Tom Albanese, chief executiveofficer of London-based Rio Tinto, told Bloomberg Television’sErik Schatzker on “Inside Track” today during the WorldEconomic Forum’s annual meeting in Davos, Switzerland. “We’relooking at 8 percent plus growth in that market.”
China’s economy may grow 8.4 percent this year, comparedwith global expansion of 2.5 percent and a 0.3 percentcontraction in the euro area, the World Bank said Jan. 18.
Chinais the biggest user of everything from energy to copper tocotton and the largest customer for iron ore produced by RioTinto, the world’s third-largest mining company.
“I was just in China a couple of weeks ago,” Cynthia Carroll, chief executive officer of Anglo American Plc, toldMaryam Nemazee on Bloomberg Television’s “Countdown” in Davos.“We think this year it will range between 8 and 9 percent andgoing forward, very, very similar sort of growth.”
The U.S. economy will grow 1.8 percent this year, while theeuro-region will shrink 0.5 percent, the International MonetaryFund
U.S. Growth ‘OK’ “We’re looking at the U.S. slowly coming out of a toughspot, 2 percent growth that’s probably OK for us,” Rio’sAlbanese said. “Europe, although it’s difficult for many, manyeconomies, is probably less of an effect for us, as long as theramifications of the euro would not have consequences outside ofEurope.”
Rio, the second-largest exporter of iron ore, will postrecord full-year profit of $15.6 billion, according to theaverage estimate of 19 analysts compiled by Bloomberg. Thecompany is due to report earnings Feb. 9.
“The steel outlook is very, very robust as well, off ofthe back of the economic development and transformational changein the emerging countries led by China,” said Carroll, who runsthe world’s largest platinum producer. Still, the companyexpects softer prices for iron ore and metallurgical coal, thetwo key steel-making ingredients, in the first-half, she said.
Rio said in November it expects to increase capitalspending 17 percent in 2012 and raised its iron ore expansiontarget to meet demand from China. It plans to invest at least$14 billion in developing projects this year, which may rise onfurther approvals, it said at the time.
“We’ve been saying through the course of 2011 that wewould expect that China would avoid a hard landing, and that’swhat I would think now,” Rio’s Albanese said. “Our order booksare full, we’re selling everything that we can produce.”
To contact the reporters on this story:Jesse Riseborough in London at firstname.lastname@example.org;Carli Lourens in Johannesburg at email@example.com said Jan. 24 in an update of its World Economic Outlook.The IMF sees Chinese growth slowing to 8.2 percent this year andglobal growth of 3.3 percent. The euro-region will shrink 0.5percent, it said.
To contact the editor responsible for this story:John Viljoen at firstname.lastname@example.org