Rio Tinto bullish despite Europe woes

Rio Tinto, the world's third largest miner behind BHP Billiton and Vale, is bullish on the demand for commodities despite renewed volatility in Europe and the risk of financial contagion.

According to media reports from the company shareholders meeting in Brisbane, Rio Chairman Jan du Plessis is more confident about the outlook for commodities demand than six months ago, and the company's ability to weather any shorterm volatility.

"Over the longer term, we continue to believe the outlook remains strong with demand for many of the products we produce expected to double over the next 20 years," he said.

On the current slowdown in China, the biggest consumer of industrial metals including iron ore and copper, du Plessis said "the rate of growth is still very favourable in comparison to global economic growth."

The chairman said he is sanguine over signs of a recovery in the US but emphasized Europe is still a concern.

"Whilst the European Central Bank has in recent months managed the sovereign debt crisis in Europe well, recent events have shown that the situation is clearly not resolved and the potential for contagion continues to linger," he told the meeting.

Rio Tinto is seeking to increase Pilbara’s capacity by 50% before 2013 to 353 million tonnes a year, creating the country’s largest integrated mining project. Rio's plans for substantial expansions in the Pilbara, Australia's iron ore heartland, includes the approval, earlier this year, of US$3.4 billion worth of funding for its iron ore operations.