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Rio Tinto boss predicts moderation of mining -

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Rio Tinto boss predicts moderation of mining boom

AM - Friday, 2 February , 2007 08:25:00

Reporter: Peter Ryan

TONY EASTLEY: The resources boom has delivered another bumper year for the world's second biggest
mining company, Rio Tinto.

The mining giant returned a profit of just over $9.5 billion in 2006. That's up 43 per cent and the
second highest profit in Australian corporate history.

Rio Tinto's Chief Executive, Leigh Clifford isn't predicting an end to the resources boom, but does
see some moderation ahead.

Mr Clifford says Rio is well positioned to provide Uranium to a future nuclear power industry in
Australia, but he's sounded a word of caution on how to deal with climate change.

Leigh Clifford is speaking here from his home in London to our Business Editor, Peter Ryan.

PETER RYAN: Leigh Clifford, thanks for joining AM.

Does the resources boom still have some life left in it, or is this as good as it gets?

LEIGH CLIFFORD: Well, I think it's got some life in it. Firstly, you're seeing global growth in
2007 predicted to be around plus-four per cent, you're seeing strong growth in China, an improved
situation in Japan from a couple of years ago, quite reasonable growth in Europe, a bit of
uncertainty in the US, but I think quite encouraging.

PETER RYAN: How reliant are you on that appetite from China in particular, to maintain the profits
that investors are now very used to?

LEIGH CLIFFORD: Well China's very, very important. I might add that economic activity in China is
very important for the world, to be honest and clearly it's most important for our iron ore
business, but it impacts on a range of other metals.

And frankly, when you visit China you can see where that metal is being consumed.

PETER RYAN: You say the outlook is strong and balanced but you're expecting some moderation in
global economic growth and in particular inflation and interest rates are causing some concern. How
significant are those worries?

LEIGH CLIFFORD: Well I think it's more just putting a little bit of an amber light there.

I'd have to say you're seeing in China the Government taking some steps to take a little bit of
heat out of the market. Now that's not a bad thing. I think they'd like it in high single-digit
growth rates as distinct from double-digit growth rates.

They're managing it pretty well and I'd have to say, you know a slight amber light but overall,
pretty encouraging.

PETER RYAN: The future of nuclear power, as you know, is a big issue in Australia and Rio Tinto has
a lot to gain as a Uranium miner.

Where do you stand on the future and safety of nuclear energy?

LEIGH CLIFFORD: We've got some prospects for increasing our Uranium production in the two to five
year time frame, so in the relatively short time frame. And clearly the nuclear power industry of
the world is going to be supplied by Uranium from somewhere and I think there's a real opportunity
for our group and Australia to be the supplier and be the reliable supplier.

PETER RYAN: You're about to step down as CEO after 37 years with Rio Tinto. What sort of
responsibility should the resources sector be taking for global warming, particularly in light of
the latest evidence we're seeing?

LEIGH CLIFFORD: Well I think the situation is there's been a fair bit of debate and frankly, I'm
not sure that Kyoto in itself resulted in significant action.

I think the important thing is to recognise this is an issue which is going to take place over
decades and we've got to make sure that industry is responding. We can't take action which
jeopardises the economics of many of the industries in Australia and only to see them pop up
somewhere else, and maybe not quite as efficiently as we carry them out in Australia.

TONY EASTLEY: The Chief Executive of Rio Tinto, Leigh Clifford, speaking there with our Business
Editor Peter Ryan.