MOSCOW, Feb. 4 -- Economic growth in China and India is likely to double global demand for aluminium, iron ore and copper over the next 15 years, requiring a big response from miners, a Rio Tinto (RIO.L: Quote) (RIO.AX: Quote) official said on Wednesday.
Short-term demand was more difficult to gauge, Rio Tinto (RIO.L: Quote) Chief Financial Officer Guy Elliott said, because of concerns over government stimulus packages and speculative activity linked to low interest rates.
"For the longer term, I feel that the intensity of use of some materials in India and China will lead to a doubling in global demand for aluminium, iron ore and copper over the next 15 years," Elliott told the Troika Dialog investment forum.
"The demand will be so strong in the long term that it will require a great supply response. It is possible to see that this combination of demand and supply will elevate prices," he said. Rio Tinto is the world's second-largest iron ore miner and aims to boost production by 6 percent in 2010, encouraged by much higher spot prices as China's steel industry -- the world's largest -- gobbles up more raw materials.
However, Rio Tinto is running some of its aluminium smelters at below capacity. Though aluminium prices have recovered from the depths of the global financial crisis, LME warehouse stocks worldwide are still above 4.6 million tonnes.
Elliott said monetary policy in the United States was creating "a few concerns" for non-Chinese growth in demand for industrial metals.
"So a mixed picture in the short term," he told the conference, "but in the long term, there is a strong picture rising from increasing urbanisation of China and India."