The positive long-term outlook for global commodity prices is unchanged, global miner Rio Tinto's chief executive said today, shortly after Australia's resources minister called the peak of the country's resources boom.
A slowdown in Chinese demand for the commodities that have driven the boom, particularly coal and iron ore, has pressured prices and forced miners across Australia to cut costs by delaying projects and laying off workers.
"The long term picture for me hasn't changed," Tom Albanese said, adding, "I would have never have said there was a boom in the first place."
Rio stuck to $16bn (£10bn) in spending plans when it reported earnings this month, despite first-half profit falling by a third, and predicted a modest pickup in the Chinese economy later this year that should stimulate demand for iron ore.
"We definitely see a soft demand period in China as it's still in the throes of a soft building cycle," Albanese said.
"So it's not a normal business cycle. Highs are higher, lows are lower, it's pretty scary, but we've got to be in a position where we're resilient in that circumstance," he said, calling for a cautious investment approach.
City A.M. Reporter