Peak metals talk premature: Rio Tinto CEO

Rio Tinto Ltd chief executive Tom Albanese says speculation about the global supply
of metals peaking is "perhaps premature" given there remains an "absolutely
enormous" endowment of minerals around the world.
But Mr Albanese says the global financial crisis resulted in many capital investment
plans to support an increase in production of minerals such as iron ore being left
on hold.
"A look at any iron ore growth chart will tell you that there has been tightness of
supply in recent years," Mr Albanese said in prepared remarks to the China Overseas
Investment Fair in Beijing on Wednesday.
"Global iron ore production has been simply outpaced by the rapid growth in China.
"And despite enormous capital investments in new production capacity, there are
still shortfalls in iron ore supply that the industry is trying to close.
"Adding to this scenario, the global financial crisis simply compounded the
situation by delaying many capital investments.
"And it is not yet certain when iron ore production will catch up with global demand."
Mr Albanese said growth helped boost mining revenues, but did come in additional
capital requirements.
"In fact, growth projects could potentially consume the entire free cash flow of the
industry," Mr Albanese said.
"Financing projects will probably require non-traditional sources of capital."
Mr Albanese said Rio planned to increase iron ore production at the company's
Pilbara operations by 50 per cent over the next five years.



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