PERTH (miningweekly.com) – Mining major company Rio Tinto’s boss, Sam Walsh, believes that open markets are the most effective way of creating wealth during the downturn in commodity prices.

Speaking in Korea at the end of last week, Walsh noted that while there was a temptation to be parochial during the current downturn in the hope that artificial and temporary barriers would alleviate the “pain of awkward transition”, and the mining company CEO warned that being parochial could delay necessary change or amplify the response required.

“We can see such requests and pleas for new barriers, from some in government and some in business. But free and open trade is the key to success,” he noted.

Walsh’s comments – although not directly linked in his speech – came as Fortescue chairperson Andrew Forrest is pushing for production caps on Pilbara iron-ore production to arrest declining prices. Western Australian Premier Colin Barnett has backed the call.

“When times are tough, there is a temptation to turn inward. But we must keep our minds and our markets open.”

“We need to recognise that each age of globalisation produces a new wave of innovation. When the world looks outward and collaboration increases, ideas emerge. This happened during the rush of globalisation in the late 19th century, when companies like GE, Coca- Cola, Ford and Rio Tinto were born.”

Meanwhile, Walsh maintained Rio’s optimistic outlook for future commodity demand, noting that China’s demand for commodities continued as the country continued to grow at more than double the world economic growth rate.

“Each country has its own growth trajectory, and each metal has its stage in a cycle. And I can assure you there are major demand needs for the metals and minerals we produce for decades to come.

“Iron-ore will remain the backbone of Asia’s infrastructure needs. In copper the world will need another four- to five-million tonnes of new supply by 2025. The outlook for bauxite and alumina is also strong given the next phase of urbanisation, and consumption is driving products as diverse as diamonds and borates.”

Walsh noted that while it was uncertain how long the current challenging price environment would continue, he felt assured that companies with high-quality assets and people, and with innovation cultures at their core, would not only grow, but thrive and make their own futures.