Rio CEO Turns China Optimist as Construction View Improves – by Jesse Riseborough and Jonathan Ferro (Bloomberg News – September 19, 2016)

Rio Tinto Group, the world’s second-largest mining company, is becoming more optimistic on the outlook for commodities demand in China after recent data pointed to a pickup in the construction market.

“The drop that we had experienced for the last two or three years in China seems to have plateaued,” Chief Executive Officer Jean-Sebastien Jacques said in an interview with Bloomberg Television in New York on Monday. “We are becoming much more what I would describe as cautiously optimistic in relation to China.”

The $57 billion company is looking to rebound from its worst profit since 2004 as a slowdown in China hurt commodity prices, eroding earnings and forcing Rio to trim its dividend payment. The country makes up about half of the world’s raw-materials demand and also accounts for half of Rio’s revenues. Ivan Glasenberg, who heads rival Glencore Plc, last month said the Chinese market looks “pretty good” in the long term.

Jacques, who took over the CEO role in July, also attributed his more buoyant outlook on China to meetings with government officials, suppliers and customers in the country two weeks ago.

Chinese home prices rose the most in more than six years last month, National Bureau of Statistics data showed Monday. Rio rose 1.3 percent to A$47.17 in Sydney trading at 11:08 a.m., extending its advance this year to 5.5 percent.

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