Rio Tinto said that an upward trend in China's demand for more imported iron ore was intact despite signs of softening steel production, leading the global mining house to step up expansion work at its mines. Mr Tom Albanese CEO of Rio Tinto said that "We continue to see year on year growth in Chinese steel consumption, even though last month you would have seen some softness in steel production.' He said that "We still see the same demographic trends and urbanisation trends notwithstanding all the global issues... and I wouldn't see that changing before 2015.'
Rio earlier on Monday raised its iron ore expansion target by 20 million tonnes to 353 million tonnes a year by the first half of 2015, from around 240 million tonnes a year now. According to Mr Albanese, there is also an option to increase annual capacity further to 453 million tones. That would place Rio on near-par with Vale, which aims to boost yearly iron ore output to 469 million tonnes by 2015 from 308 million in 2010.
Separately, Mr Marius Kloppers CEO of BHP cautioned steel production growth had stalled in China, where both companies sell the lion's share of their iron ore. He said that "When we talk to our Chinese customers, there is not a sentiment that the operating rate in the steel industry will improve or change dramatically over the next little while.'