Rio's boss all fired up after China tour

CHINA'S rapid industrial revolution is showing no signs of cooling down, says mining giant Rio Tinto.

Following a tour of the country's industrial hot spots, chief executive Leigh Clifford said: 'Any amber lights are pretty hard to see. If anything, we have all underestimated China a bit.'

This is positive news for the global economy and for the prices of basic commodities such as iron ore, copper and aluminium.

China's recent boom has helped to drive the economic recovery, as it sucks in basic materials and more advanced Western products.

The country's iron ore imports rose a third last year. Producers are working 'flat out' to meet demand, says Clifford.

Rio plans to raise iron ore prices 18.6%, its second-biggest hike on record.

But prices for commodities mainly used in more advanced economies, such as titanium dioxide and zircon, remain sluggish.

Beijing caused jitters last year when it warned it was taking steps to slow the pace of growth.

Despite high prices for its products, Rio Tinto saw full-year profits fall 10% after tax to £759m as currency movements cost it £226m.

Costs rose with commodity-based currencies including Australian and Canadian dollars and South African rand. Rio sells its products in US dollars, which fell sharply. For the same reason Rio's dollar dividends, up 7% in dollar terms, ease 1p in sterling to 35p.

Chairman Paul Skinner admits the dollar outlook is 'a significant uncertainty' in an otherwise bullish outlook-The greenback continued to stabilise, firming 0.55 cents against the pound to $1.818, and 0.42 cents against the euro to $1.241.

Rio shares, which have doubled in five years, fell 36p to 1424p or 17 times likely earnings.