Chinalco executive sees mining boom lasting for several decades
While much of Australia’s mining industry is struggling, one of China's top corporate officials said the future is strong for the industry as China’s urbanization process will continue for several decades.
Chinalco boss Xiong Weiping said about 52 percent of Chinese people lived in urban areas and that rate had been increasing about 1 percent each year, the Sydney Morning Herald reported.
''Based on this speed, urbanization will continue to boost China's domestic demand for at least 30 years before it reaches the rate of 80 percent,'' he said.
Speaking at a Melbourne Mining Club event in Beijing, Xiong said China's demand for minerals had traditionally been higher than the nation's overall economic growth, which meant demand for minerals and commodities should be stronger than the expected growth rate of 7.5 percent in coming years.
''If China's future GDP growth stands at 7.5 percent, the growth rate of China's demand for minerals will be above 7.5 percent,'' he said.
The Sydney Morning Herald reported that in his speech he said, ''It's worth mentioning that China will enter a key stage of accelerating industrialization and urbanization in the next 10 years and even longer, when the demand for mineral resources will continue to be strong.
''All international mining companies should grasp these rare opportunities in China's mining industry and make the best of it.''
The comments come after a year of debate in Australia about the mortality of the ''China mining boom,'' with some such as former prime minister Kevin Rudd declaring the lucrative phase to be over.
While China is a huge buyer of all minerals and commodities, it dominates the iron ore trade, which ranks as Australia's most lucrative export industry.
Strong urbanization rates are typically a good sign for iron ore exporters, as it suggests ongoing demand for steel ingredients to build apartment towers, railways and bridges.
Chinalco is the biggest shareholder in Rio Tinto, whose chief executive, Sam Walsh, said the company's relationship with Chinalco was ''now the strongest it has ever been."
''The Chinalco group is no longer just a shareholder; it is now one of our most important business partners,'' he said.
The two companies have agreed to set up a joint venture that will seek to develop the next era of mining technology.