SYDNEY: Rio Tinto chief Tom Albanese n Sunday said Australian iron ore was the firm's top growth priority, with demand set to outstrip supply of the precious steelmaking metal until at least 2013. The Anglo-Australian mining giant revealed an almost tripling in annual net profit this week to $14.32 billion as commodity prices skyrocketed on strong demand, saying it would hand $5 billion back to shareholders. The market had been “pleasantly surprised” by the share buyback but Albanese said Rio's prospects were strong, with global growth running at between 4-5 percent – “higher than we would've expected” – and a “good long-term picture.” Albanese said the “very strong” iron ore prices were better than he would have anticipated 12 months ago, “with certainly a demand that's continuing to be well in excess of what the supply is.” “Realistically, if we look over the next year or two it's hard to find big new areas of supply globally, particularly in 2011,” he told ABC television. “But as 2013, 2014, 2015 start winding in, you're going to see a lot of new iron ore coming in the market and it's probably going to put the market closer in balance than we would see right now,” he added. Rio's “number one growth priority over the next five years” would be expanding its Pilbara iron ore operations in western Australia, he said, with two thirds of the $12 billion in investments announced in the past 12 months targeting that project. Extending its Australian operations was also Rio's focus in the coal sector, with its $3.9 billion play for Riversdale – well established in Mozambique – seen supplementary to that and only “if the right conditions all take place.” Albanese was cool on the lucrative potash fertilizer market, saying he saw it as an “exploration” asset rather than something to pursue through merger or acquisition. Rival BHP Billiton made a hostile $39-billion push for Canada's Potash Corp last year, the world's leading fertilizer maker. Though it was ultimately blocked by Canadian politicians, the bid was seen as underscoring the growing importance of fertilizer, especially to major importers such as China, in the face of mounting global demand for food.
