Rio Tinto eyes iron ore price increase

Speaking at the annual meeting of shareholders in Melbourne, Australia, Rio Tinto Chief Executive Officer Leigh Clifford said, they were expecting an increase as a result of the iron ore negotiations held with China. According to the CEO, China will continue to support metal prices above the long term trend for some more time. China now accounts for between 20 and 30 percent of total global iron ore demand. Furthermore, 15 percent of Rio Tinto's total sales revenue in 2005, over $3 billion, was derived from China. Mr. Clifford said, “It is worth noting the increasing gap between demand and supply of key mineral resources in China. While this may be offset to some degree by discovery of new mines in China, geological prospectivity is a key factor and identifying new indigenous resources is a challenge,” and added that China consumes 33 percent of all steel, but produces only 17 percent of the world's iron ore.