It looks like the global economy is still on the road to recovery. Problem is, that road might be getting somewhat slippery according to Jan du Plessis (chairman of Rio Tinto). He says that markets around the world, “remain fragile.” He spoke about this at today’s yearly miner’s meeting that took place in Perth. Although the company’s long-term situation looked pretty good, according to du Plessis, it is still dealing with significant short-term issues. He blames this on the frailty of the global economy which is creating significant “financial imbalances.”
Global Economic Issues Meet Political Problems
So why is this? Why are things still so frail and uncertain with the global economy? It’s a lot to do with what is going on throughout the world politically such as (usual culprits) Mid-East crisis. But the Eurozone also has what to answer for if you start looking at more direct issues, focusing on the actual economy. Still, there is hope that all of this will just fade away at some point since long-term, the situation looks better.
Organic Rio
du Plessis believes organic is the way to go. Indeed, his company is putting its focus on organic growth. As well – in an attempt to advance further – it is still looking at medium-sized acquisitions, which was evident in the takeover earlier in 2011 of Riversdale Mining. As well, there seems to be quite a high demand for iron ore and there is still significant development in Asia (China and India specifically). Further, there has been more of a focus on “renewable source of energy” which will probably motivate increased desire for copper. So according to Tom Albanese, the company’s chief executive, when the company thinks about its future plans, it “see[s] a world of strong global demand, in an environment of constrained supply.” He believes the world will basically e using as “much iron ore as it has over the last 10,000 years.”
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