It is reported that Rio Tinto PLC will consider switching to the Chinese currency for settling iron ore prices, but has no immediate plans to do so.
Mr Sam Walsh chief executive of the mining giant's Australian operations said that "It is a complex issue adding that the company's financing was in US dollars.”
Mr Walsh said the company will study the possibility of adopting the yuan, adding he was aware that some other companies have said they would consider switching.
He added that "We always look at a range of things that develop in our business. While Rio doesn't hedge currency, use of the dollar acts as a natural hedge against currency fluctuations.”
Mr Walsh said “He expects to see a fall in the iron ore price in the future as supply catches up with demand, although at the moment some companies are finding it difficult to develop mining projects and work has been slowed by the financial crisis and last year's debate in Australia over the possible introduction of a tax on resources super profits.”
Key bulk commodities such as iron ore and coal, which are driving Rio Tinto's profits, are priced and settled in dollars. However, demand for the commodities is being driven by rapidly industrializing economies in Asia, particularly China, which is the world's biggest consumer of steel and iron ore. (sourced from Dow Jones Newswires)
Mr Sam Walsh chief executive of the mining giant's Australian operations said that "It is a complex issue adding that the company's financing was in US dollars.”
Mr Walsh said the company will study the possibility of adopting the yuan, adding he was aware that some other companies have said they would consider switching.
He added that "We always look at a range of things that develop in our business. While Rio doesn't hedge currency, use of the dollar acts as a natural hedge against currency fluctuations.”
Mr Walsh said “He expects to see a fall in the iron ore price in the future as supply catches up with demand, although at the moment some companies are finding it difficult to develop mining projects and work has been slowed by the financial crisis and last year's debate in Australia over the possible introduction of a tax on resources super profits.”
Key bulk commodities such as iron ore and coal, which are driving Rio Tinto's profits, are priced and settled in dollars. However, demand for the commodities is being driven by rapidly industrializing economies in Asia, particularly China, which is the world's biggest consumer of steel and iron ore. (sourced from Dow Jones Newswires)
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