Rio marks the re-emergence of the miners – by Robert Gottliebsen (The Australian – November 28, 2016)

In the next two years we are going to have a mining profits boom of considerable magnitude. Don’t be surprised to see the profits of some mining companies rise 50 to 100 per cent above their lows. Sometimes the rise will be even more.

I reached that conclusion as I was listening to the address by the chief executive of Rio Tinto Jean-Sébastien Jacques to some 700 mining, accounting, investment, legal and other executives at the Melbourne Mining Club last week.

Jean-Sébastien Jacques did not actually mention profit trends, so, to get the message, you had to listen very closely to what he was saying and combine that with the mood of the people at the function.

I think Rio Tinto understands what is happening in China better than any other large mining company. Its major shareholder is a big China state-owned enterprise and, of course, China is Rio Tinto’s main customer.

Jacques has spent a large part of his first year as CEO in China. He told the Melbourne Mining Club that, given the politics of the country, it was virtually certain that it would meet its projected growth over the next two years.

Assuming that is right, and there is no better source than Jacques, then commodity prices are going to remain strong unless China unleashes a tirade of local coal and iron ore production to flood the market.

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