Record profits at Rio Tinto thanks to Chinese demand

Image caption,
Rio has had to increase iron ore production to meet demand from China

Rio Tinto's profits for the January to June period have reached a record first-half high for the firm, fuelled by Chinese demand for its iron ore.

The Anglo-Australian group saw its half-year net profits more than triple to $5.8bn (£3.7bn).

This compares with $1.6bn for the same six months last year.

Earnings from Rio's iron ore operation, the biggest part of its business, more than doubled to $4.1bn, up from $1.9bn a year ago.

Meanwhile, its aluminium arm returned to profit, with earnings of $313m, as overall metal demand and prices continued to rise as the global economy improved.

The aluminium business had struggled since Rio purchased Canada's Alcan for $38.1bn in October 2007, only to see metal prices then fall sharply in the second half of 2008 as the global recession took hold.

Rio's chief executive, Tom Albanese, told the BBC's World Business Report programme that while China was the main driver of its higher sales and profits, other parts of the world had also being buying more metals.

"The stabilisation of the economies in Europe and the US also played a large part too," he said.

Mr Albanese said continuing Chinese efforts to slow the speed of its economic growth would not have much impact on Rio.

"China will still be a very metals-intensive economy," he said.

Anglo-Swiss miner Xstrata reported on Tuesday that its first-half profits had tripled to $2.3bn, again thanks to rising global metal demand and prices, which are boosting all of the world's main mining companies.

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