Rio Tinto expects demand to remain 'positive'

Rio Tinto Ltd (ASX:RIO) today said it believed the outlook for aluminium demand, and demand for its other products, would remain positive while global economic growth remained strong. "While there are concerns about the state of the credit markets, particularly in the USA, we do not anticipate that these will have a material short-term impact on our markets," chairman Mr Paul Skinner said. The company earlier today announced net earnings fell 14.3pc to $US3.253bn ($A4.016bn) in the six months ended June 30. ***** Chief executive Mr Tom Albanese said, "Rio Tinto's longstanding strategy, which is founded on the creation of long-term shareholder value through the pursuit and operation of the world's best ore-bodies, remains unchanged. "Rio Tinto has an industry-leading pipeline of organic growth opportunities with in excess of $9bn of committed projects across our portfolio and further significant projects under consideration. "Our record program of investment in organic growth continued in the first half of 2007, with particular emphasis on the expansion of our iron ore business in Australia. "We are on target and schedule to reach 220m tonnes per annum of managed iron ore production in the Pilbara in 2009, and are now undertaking studies into the potential to increase annual production capacity to 320m tonnes. "The long-term growth trend in Chinese iron ore import demand will require continuing investment by the group, and will open up further supply opportunities outside Australia, such as our high-quality resource at Simandou in Guinea, where we are looking at developing a 70m tonne per annum operation. "Our portfolio of copper development projects made progress during the year, with the Oyu Tolgoi project moving a step closer to development approval when the Mongolian Government announced its completion of a draft investment agreement in June." ***** "We are pleased that the Alcan board has recommended our cash offer to its shareholders. "Our position in the global aluminium industry will be transformed by this transaction, which will make us number one global producer of aluminium and bauxite. "We will be a leading alumina producer with the capability to become number one through organic expansion, such as our recently announced two million tonne per annum expansion of the Yarwun alumina refinery in Queensland. "Our ongoing investment in common systems across Rio Tinto will accelerate the integration of Alcan into the wider group. "Following completion, we will be a bigger group and will be undertaking a strategic review to determine which of our businesses have the long-term competitive position to be part of the enlarged Rio Tinto. "The proceeds of any disposals, which are expected to exceed $10bn, will be used to de-leverage our balance sheet," Mr Albanese said.