By Rhiannon Hoyle
MELBOURNE, Australia--Rio Tinto PLC's (RIO) top ranks warned of
continued volatility in world markets, although some bright spots
are emerging, and reiterated the company would look at new major
investments when industry conditions improved.
Since the early years of the global financial crisis, resources
companies have experienced market volatility greater than in living
memory, said Jan du Plessis, chairman of Rio Tinto, one of the
world's largest mining companies.
"Financial markets continued 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," he told
shareholders at the miner's Australian annual general meeting in
Melbourne Thursday.
He cited tensions in Europe, where he said considerable
challenges remain due to the combination of low interest rates, low
growth and low inflation. The tapering of the U.S. Federal
Reserve's quantitative easing program, which has supported
commodity prices in recent years, is also "uncharted territory," he
said.
Nevertheless, he signaled confidence in China as Beijing works
to move toward a period of more sustainable economic growth, even
if it does create "some variability in the near term," Mr. du
Plessis said.
"There is no question, however that the Chinese leadership
remains committed to pursuing economic reform which offers
potential benefits for the global economy in the long term, even if
there is some variability along the way," he said.
Also speaking at the meeting, Chief Executive Sam Walsh said Rio
Tinto would review new major projects, like its Resolution copper
development in Arizona and the South of the Embley bauxite project
in Australia's Queensland state, "when the time is right."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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