19 Nov 2010
RIO Tinto says the risk of commodity price volatility will extend into 2011 but China's moves to cool its growth are healthy. Rio chief executive Tom Albanese unease about the sustainability of the global economic recovery and increased speculation
amid easing monetary policy in the some developed countries have
heightened the shorter-term risk of commodity price volatility.
"In the short term, I think we're still dealing with quite jittery economic conditions," Mr Albanese told the Dahlman Rose & Co mining conference.
"We could see the risk of volatility playing into our markets during 2011."
Still, Mr Albanese said that the moves by China to cool its growth are healthy for the global economy.
The world's largest commodities consumer is driving the world's recovery, but "we don't want it to overinflate," or create a bubble, he said.
Mr Albanese is "reasonably satisfied" with China's approach to heading off inflationary pressures, he said.
After raising interest rates last month, China is drafting further measures aimed at curbing overly fast price rises. The nation also announced new limits restricting the ability of foreigners to buy residential or commercial property on the mainland.
Fiscal stimulus in China during the economic downturn helped spark the global recovery, which has boosted prices for the commodities sold by Rio Tinto, the world's third-biggest miner, and second-biggest producer of iron ore.
"For Rio Tinto, we've had strong markets all this year," Mr Albanese said.
"We are operating at close to capacity in virtually all of our businesses."
Source: Dow Jones