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00:00How do you see the global economy shaping up right now, given that China has slowed down? Property sector has been, you know, absolutely battered. Iron ore has had a bunch of fluctuations. It's down right now. How do you assess the global economy from the position of China right now? It's tough. I mean, I think the the you know, looking under underlying consumer demand, you know, that's not as strong as it has it has been. But that said, I think there's a lot of there's still fundamentals that are there in terms of of core investments that need to be done, this energy transition that we're in the middle of the urbanization that's going on, the innovation that's happening on so many different dimensions. So I would I've called a frightened optimist. What kind of stimulus would you like to see in the last few months of the year to kind of put a floor on the property sentiment that could then, of course, lead to steel demand? Iron ore, there's a lot of surplus energy. You're talking about China now? Yeah, I think with China, fundamentally there's a property restructuring that's going on. It's been going on for a while and it'll probably be go going on for a little while longer. I don't think this is really about iron ore or anything like that. It's about a shift in the in the economy. The key thing is unlocking the consumer, right. And the challenge with that is you've got with property prices going down and people having a lot of their wealth and property, they they feel less wealthy and we're seeing the effect of that. I think the property restructuring probably has to continue. I don't think that can change. There's a there's a process there they're going through. I think the issue is how do we give people, the consumer the confidence about where things are moving? Obviously, you know, stimulus programs and so forth are music to people's ears. But I think what we have to understand is there's a there's a deeper restructuring for growth that's going on. So, you know, I'm it's it's tough right now, but I'm I'm actually actually more longer term optimistic. Again, when you look at the investment that's going into into the greening of this economy, it's just it's massive and it takes steel to be able to build wind turbines and grids and so forth. Aluminum, copper. You know, from our point of view, that's going to be the urbanization is at 65%. That's where the US was in the late fifties, early sixties. It got this consumer side that needs to be unlocked. That's the that's the conundrum. But I'm I'm not I'm not worried about this the economy particularly in the in the medium term. Where would that lead then to your assessment of possible inorganic growth in your capital allocation going forward, given the the situation here in China? And which areas would you like to see inorganic growth because you've been relying mostly on greenfield projects? And yeah, when will the organics going to remain fundamentally important? You know, we've got this massive supply demand gap. You're not going to inorganic your way to solving that. You know, we're going to need to we're going to need to mine discover mine and process more copper in the next 30 years of. Do you have Oyu Tolgoi. Yeah, not on line fully, yeah. But I'm saying the world needs to do it or what I'm saying is going to by just going out there, of course we're going to be thoughtful and looking at where there are opportunities. But I'm saying as an industry we're not going to inorganic our way out of the challenge because of this massive supply demand gap. It's just it's huge and it's in at least five different commodity areas. And so that's going to need more mining. We're going to need to develop more projects. So we're just not going to be able to get it done. So of course we're always going to be open and interested in seeing what opportunities are there. But the fact of the matter is we need to build more to be able to meet this gap that's just continues to grow. How about in the lithium space? My understanding from those I've talked to said there needs to be a consolidation. How much consolidation and how much of a player? Well, I don't want to get into any specifics of it, but what I would just say is I think that they're, you know, to be able to only just EVs and the shift to EVs, which I, by the way, don't think is going to be about policy, it's they're just they're actually proving to be fantastic cars. So regardless of the tariff regimes that are being put in place, yeah these are going to go something to go. They're going to they're going to they're going to they're just going to be the consumer demand for them. I mean, look at this. Show me as you seven is what you see. It's performance versus the Porsche. You know, it's these are phenomenal cars. People are going to buy them. You need batteries. You need battery materials to be able to do that. So I'm I feel very optimistic about, you know, the growth there. And I think the challenge is the it's taking a long time to be able to get permitting, you know, to be able to build these projects. And. Well, you mentioned copper and you had some regulatory issues in Arizona. Yes. Well, does that, dare I say, a Trump administration help that it would be a different administration, different approach? I don't know. I mean, our view is that, you know, we want we have to make sure that we're working with the first nations that are. In that property. We have a number of them that are very positive. We have and we have to do that. But the fact that that could represent 25% of us copper demand that we could supply that that's there. But we have to go through the the process for it. And I think, you know, already in the during the Obama period, there was a support for it. And I think I think the issue is we just have to follow the due process and work it through that way. As long and painful as that may be, that's what we have to do to do it properly. You wear many hats, obviously. The chairman of Rio Tinto. You're also chairman of Leapfrog Investments, investing in, I guess, the Global South and other areas. But you're also the former Canadian ambassador to China. I want to get your assessment of what's going to be the dampening effect to this bifurcation that we are seeing increased trade wars, global trade, geopolitics has really split the world and nations and blocs are choosing being forced to choose sides. What's that do to inflation? Was that due to global growth and global trade? Yeah, I'm worried about fragmentation, as you said. I don't think I don't think we can have decoupling because I think the impact on inflation and on the consumer is just untenable. I just but that's the kind of the the direction, right. The sort of the fragmentation and it has a cost. And so I do worry about that. I mean, it's we as we need resilience. We all learned we needed supply chain resilience from COVID. But this notion of of fundamentally breaking down supply chains, we just have to recognize there's big cost to that and the costs will be borne by the consumer.

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Rio Tinto Chairman on Supply Crisis, China Economy

Rio Tinto Chairman Dominic Barton says the world needs more mines to offset a coming supply shortfall across commodities including copper. He says mergers and acquisitions are not enough to plug the gap. Barton spoke exclusively with our Chief North Asia Correspondent Stephen Engle at the IBLAC meetings in Shanghai, where they began by talking about the current difficult state of the Chinese economy. (Source: Bloomberg)

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