Chinalco says mining boom has decades to run
In words that will comfort Australia's massive iron ore export industry, Chinalco boss Xiong Weiping said about 52 per cent of Chinese people lived in urban areas and that rate had been increasing about 1 per cent each year.
"Based on this speed, urbanisation will continue to boost China's domestic demand for at least 30 years before it reaches the rate of 80 per cent," he said.
Speaking at a Melbourne Mining Club event in Beijing, Mr 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 per cent in coming years.
"If China's future GDP growth stands at 7.5 per cent, the growth rate of China's demand for minerals will be above 7.5 per cent," he said.
"It's worth mentioning that China will enter a key stage of accelerating industrialisation and urbanisation 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.
Others such as BHP Billiton boss Andrew Mackenzie have argued that Asian demand for commodities will remain strong for decades, and Australia can continue to profit from it so long as it improves productivity and its industrial relations system.
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 urbanisation 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.
Frequently Asked Questions about this Article…
China's urbanization is expected to continue boosting domestic demand for minerals for at least 30 years, as the urbanization rate increases by about 1% each year until it reaches 80%.
China's urbanization is expected to continue boosting domestic demand for minerals for at least 30 years, as the urbanization rate increases by about 1% each year until it reaches 80%.
Strong urbanization rates in China are a positive sign for the iron ore industry, as they suggest ongoing demand for steel ingredients needed to build infrastructure like apartment towers, railways, and bridges.
China's urbanization is a positive sign for the iron ore industry, as it suggests ongoing demand for steel ingredients needed to build infrastructure like apartment towers, railways, and bridges.
Chinalco is a major player in the mining industry and the biggest shareholder in Rio Tinto. It is also a key business partner, having set up a joint venture with Rio Tinto to develop the next era of mining technology.
China's demand for minerals is expected to grow at a rate higher than the country's GDP growth rate, which is projected to be 7.5% in the coming years.
China's demand for minerals is expected to be strong because it traditionally exceeds the nation's overall economic growth rate. With a projected GDP growth of 7.5%, mineral demand growth is anticipated to be even higher.
Chinalco is the biggest shareholder in Rio Tinto, and their relationship is described as the strongest it has ever been, with both companies setting up a joint venture to develop the next era of mining technology.
International mining companies have rare opportunities in China's mining industry due to the country's accelerating industrialization and urbanization, which will drive strong demand for mineral resources.
International mining companies are encouraged to seize the opportunities presented by China's accelerating industrialization and urbanization, which will sustain strong demand for mineral resources.
Chinalco views its relationship with Rio Tinto as very strong, with the two companies collaborating closely as important business partners to advance mining technology.
There is a debate in Australia about the longevity of the 'China mining boom,' with some declaring it over, while others believe Asian demand for commodities will remain strong for decades.
Industry leaders like Chinalco's Xiong Weiping and BHP Billiton's Andrew Mackenzie believe that the 'China mining boom' will continue for decades, driven by strong Asian demand for commodities.
China is a dominant player in the global iron ore trade, which is Australia's most lucrative export industry, driven by China's substantial demand for minerals and commodities.
Australia can continue to profit from China's demand for minerals by improving productivity and its industrial relations system, ensuring it remains competitive in the global market.
Chinalco's statement reassures Australian miners that China's urbanization and industrialization will continue to drive strong demand for minerals, providing long-term opportunities for the mining industry.
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