Rio Tinto Warns Customers Turning Cautious

Submitted by Share Market Writer on 30 November, 2011 - 17:50

Global miner Rio Tinto (RIO) still sells everything it can produce but warns that customers are becoming increasingly cautious on the uncertainty of the outlook for the Europe and United States economies.

The global miner is still generating high cash flows as iron ore prices recovered recently except for aluminium prices which were below production costs.

"However, continuing stresses in the Eurozone and a weaker outlook for the US economy are inevitably affecting customer sentiment, which has become more negative in recent months," said Rio Tinto Chief Executive Tom Albanese.

He added that he is concerned about the general softening of prices as currencies and costs increase in Australia and Canada.

"But while there are signs of nervousness, we believe the impact of current economic concerns on our business is manageable, unless financial markets substantially deteriorate," Albanese said.

Meanwhile, Rio Tinto also announced that it is targeting to reach 353 million tones a year for its iron ore expansion by the first half of 2015.