Rio Tinto forecasts 'staggering increase' in world demand for steel component
----------------------------------------------------------------------------
RIO Tinto, one of the world's largest iron ore producers, today forecast the mining industry would need to produce at least another 100 million tonnes of the steelmaking commodity every year for the next eight years to satisfy growth in demand.
Many African countries will be well placed to meet this "staggering increase" in demand, said David Joyce, head of expansion projects for Rio Tinto's iron ore arm, in the text of a speech delivered at an Africa-focused mining conference in Perth.
"As markets like China, India, Indonesia, Vietnam and countries in Africa and South America continue to industrialise and urbanise, we will see an increase in demand for better housing, cars, infrastructure and mobile phones. The level of metal intensity per capita will increase with this development," he said.
Mr Joyce said development of the Simandou iron ore project in Guinea is on track to ship its first ore by mid-2015. About $US1.5 billion ($1.4bn) has been invested toward the Simandou mine, itself forecast to produce 95m tonnes a year, 650km of railways and a four-berth wharf.
Rio Tinto previously said it expects investment in Simandou to surpass $US10 billion, and that it would make every reasonable effort to achieve first production by the end of 2014.
Simandou is a joint development with Chinalco (also known as Aluminium Corp of China), which will earn a 44.7 per cent stake in the project for its $US1.35bn investment.
In Australia, Rio has plans to invest close to $US15bn to grow its output in the western Pilbara region to 333mt a year by 2015, a 50 per cent increase over five years.