Rio Tinto CEO Sam Walsh
Photo by: Bloomberg
PERTH (miningweekly.com) – The CEO of mining giant Rio Tinto has called on the resources industry to dispel the gloom and said it should remind shareholders of the longevity of the industry in order to maintain investment in the sector.
Speaking in Melbourne, Sam Walsh noted that investment in the sector in the long-term was crucial for shareholders, adding that the current squeeze in the commodities market could well provide the next cyclical upswing.
Walsh said that the twin drivers of modernity and prosperity gave Rio "every reason for confidence" in the future of the resources sector.
“Urbanisation is not slowing, it continues at pace. By 2050, another 2.5-billion people will move to an urban environment. It’s clear these forces of prosperity and development will require more infrastructure.”
Walsh noted that iron-ore and metallurgical coal would remain the building blocks of urbanisation and industrialisation, while aluminium would be at the centre of transport and consumer needs, while the copper industry would be faced with a supply gap of between four-million to six-million tonnes a year within the next decade.
“We can safely assume the world will need many more mines like Oyu Tolgoi [in Mongolia]. So the demand signals are strong and clear. We will grow year-by-year to meet humanity’s needs.”
Walsh said that it was the responsibility of the industry to remind shareholders of the longevity of the resources sector, and that despite temporary periods of low commodity prices, the sector was continuing to grow.
“It is human nature to seek comfort in certainty because there is so much that is uncertain about our industry, from geology, to sudden market shifts, to social attitudes,” Walsh said.
“And some may therefore look for artificial constructs, of the mind, or the regulatory kind to deny or slow change. But we must embrace change. For there can be no doubt the world will continue to demand the metals and minerals that make modern life work. That is the certainty we should all focus on.”