Photo by: Bloomberg
PERTH (miningweekly.com) – Diversified miner Rio Tinto expects volatility to continue in the short to medium term, despite bright spots emerging in some parts of the world, chairperson Jan du Plessis said at the company’s annual general meeting in Melbourne, Australia.
Over the past five years, Rio had experienced market volatility unlike anything the company had seen before, he said.
“Financial markets continue to be volatile in 2013, and while the outlook is now brighter in some parts of the world, we believe that volatility looks set to remain in the short to medium term as a number of structural deficiencies remain unresolved.”
Du Plessis pointed to tensions in Europe, which remain as reforms were slow to progress, while the economic growth in the US was also uncertain on the back of the unwinding of quantitative easing by the Federal Reserve Bank.
“While the fundamental drivers of the Chinese economy remain intact, we expect some variability in the near term as authorities endeavour to steer the economy along a more sustainable and steady path of growth.”
He also highlighted political uncertainty, citing the recent events in the Ukraine, the conflict in Syria and turmoil in Egypt.
However, Du Plessis assured Rio Tinto’s shareholders that the group was better positioned than most to succeed through the cycle.
“We have a strong balance sheet. We are well on the path towards being a low cost operator. We have 140 years of experience and ingenuity to draw upon, and we have an outstanding leadership team,” he stated.
“We are well placed to turn uncertainty into opportunity as long as we remain on course and stay true to our strategy.”
CEO Sam Walsh added that the company’s focus on operational excellence set it apart from its competitors.
“Increasing productivity helps us to reduce cost, to work more efficiency and to improve performance, which, in turn, provides us with options to invest in the long-term future of our business and deliver greater returns to shareholders. We have a great long-term future,” Walsh said.