Rio Tinto seeing weaker markets but confident of overcoming turbulence

“Our order books are full and pricing is strong, but it is noticeable that markets are somewhat weaker than they were six months ago,” said Rio chief executive Tom Albanese.

Miners across the board have warned of barriers to the expansion of supply as companies, particularly at the smaller end of the scale, are hit by funding and other constraints.

“Permitting delays, labour and equipment shortages and technically challenging ore bodies are all contributing factors,” he said.

Rio said it was optimistic about global commodity demand growth over the next two decades and said that while it saw evidence of destocking in China and slowing growth rates, a policy-induced hard-landing remained “unlikely this year”.

Rio is expecting to boost production of copper after 2011 as grades improve and it begins commercial production from its Oyu Tolgoi project in 2013. The miner said that it had increased resources at its Kennecott Utah Copper Bingham Canyon Mine.

New technology would also allow it to boost copper production, Rio said, with developments including a new tunnel-boring system to be piloted at the end of next year. Copper is Rio’s second-largest contributor to profit after iron ore.

Rio said Australian coal, where production was battered along with other miners by bad weather at the start of the year, has largely recovered from the floods.