[miningmx.com] — RIO Tinto expects global markets to remain fragile in the near term and sees itself in a strong position to weather any turbulence, its chairperson said on Thursday.
The company said that it expected little impact on demand for commodities following the earthquake and tsunami disasters in Japan, and said in the long run demand may increase as Japan moved to rebuild.
“As far as the near-term outlook for the business is concerned, world financial markets remain fragile. Persistent economic and financial imbalances continue to pose risks,” Jan du Plessis told shareholders at the group’s Australian annual meeting.
“However our pursuit of operational excellence and our strong balance sheet put us in a positive position to weather this short-term volatility.”
After struggling through the global financial crisis and paying down $40bn in debt that it took on for its ill-timed acquisition of Alcan in 2007, Rio recently secured an upgrade in its credit rating from Standard & Poor’s to single A, following an upgrade from Moody’s.
Armed with the stronger balance sheet and soaring cash flows, Rio is back on the hunt for acquisitions, but has made clear it is only interested in small- to mid-size deals, worth less than $10bn.
It won 73% control of Mozambique-focused Riversdale Mining last month with a A$4bn takeover offer and has said it is looking to expand further in Africa.
