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Melbourne - Mining giant Rio Tinto's chairperson Paul Skinner said on Monday that demand for iron ore, copper and aluminium could triple over the next quarter century and that Chinese economic growth should drive strong demand for the next two years.
Skinner, in a statement in the company's annual report, restated the company line that rival miner BHP Billiton's $150bn all-stock bid for Rio Tinto isn't high enough.
"Our plans are unchanged and will remain so unless a proposal is made that fully reflects the value of Rio Tinto," he said.
"Projections for Rio Tinto's main product groups - iron ore, aluminium and copper - suggest that demand could potentially triple over the next 25 years," Skinner said, pointing to rapid growth, urbanisation and industrialisation in the developing world.
"In the short term, with low commodity stocks and a likely continuation of supply side challenges, we expect solid global economic growth, led by China, to support strong increases in demand for most metals and minerals during 2008 and 2009."
Insulated by China
Rio Tinto, which has a history of being more conservative than BHP when it comes to outlook statements and talking up its prospects, has shifted into high promotional gear as it tries to fend of BHP's offer of 3.4 shares for every Rio Tinto share.
At 05:00 GMT on Monday BHP's shares were down 52c, or 1.4%, at A$37.40 on the Australian Stock Exchange, valuing its tilt for Rio Tinto at A$127.16 a share. Rio Tinto shares were down A$3.95, or 3%, at A$126.85.
Rio Tinto should be insulated from the effects of a major US slowdown with China's economy expected to continue to grow near 10% a year, CEO Tom Albanese said in the report.
Albanese also called on Australia's recently elected Labour government to address a lack of infrastructure servicing the country's coal industry.
Rio's coal "performance has been hampered by a lack of infrastructure, the result of a legacy of uncoordinated responses by miners, rail carriers and ports," Albanese said. "We hope to see the new government in Australia begin to address this national issue as a matter of the greatest urgency."
Albanese, who took up his position in May, saw his total remuneration jumped to US$12.6m last year, from $3.28m in 2006. His salary grew to $1.49m, from $899 000 in 2006
Chairperson Skinner's salary rose to US$1.28m in 2007, from $1.114m a year earlier, while his total remuneration rose to $1.48m, from $1.29m.
- Dow Jones