Rio Tinto boss Tom Albanese was in Miami yesterday talking to Bank of America Merrill Lynch execs and others about Rio’s global opportunities.
The short of it was that Rio is well positioned for growth, and naturally that raised no eyebrows. What may have raised at least one eyebrow and a smile on analysts and brokers faces was that Mr Albanese specifically outline that despite China being a good customer now, he see’s India as the growth country of the future.
His speech comes in the wake of the Australian government’s proposed Resources Super Profits Tax (RSPT), which is seen as a little more than a tax grab by miners of all sizes in Australia.
Given the prosperity that China has afforded Australia so far, it’s worth looking where the next big growth market is. And for Rio Tinto at least, their eyes are setting firmly on the sub-continent, specifically, India.
The opportunity for growth there was neatly illustrated in this chart:
The presentation highlighted that even though India should be a source of good demand growth over the medium to longer term there is a real risk to actualizing the projected demand due to domestic supply constraints.
Mr Albanese went on to say that Indian GDP is estimated to reach current Chinese levels in 15 years, and that current Indian demand per person in 2009 was just 1 tenth of China’s.