Production at global miner Rio Tinto will increase as global demand for commodities continues to soar, while prices are likely to continue rising, the company's CFO Guy Elliott told "Squawk Box Europe" on Thursday.
Rio Tinto
Asia and particularly China are behind the "terrific demand" which sent commodities prices soaring, while speculators have only a limited role in it, Elliott added.
"This is a period of tremendous growth for our industry, we estimate that for the next 15 years demand for our products will actually double," he said. "When we look at our own production, we think that that's going to increase by 8.6 percent per year between now and 2015."
He said the industry as a whole was under pressure in terms of costs and it was affected by various shortages, but Rio Tinto managed to offset cost rises by selling second-line properties.
The company is pushing ahead in countries where it believes there are many opportunities, such as Indonesia, Mongolia and Peru, he added.
Elliott did not comment on speculation that Rio Tinto was seeking to buy other companies to help it fend off a bid from BHP Billiton , but repeated that it was acting in the shareholders interest.
"We are driven, as we always have been, by value for our shareholders. And it's on grounds of value that we rejected BHP Billiton's offer and would continue to do so," he said.
Commodities prices are likely to remain high, Elliott said, citing the example of rising prices for iron ore and coal, in which speculators find it difficult to play. "Speculators' role should not be exaggerated," he added.
Another factor leading to higher prices for commodities in the future is likely to be the Chinese currency, Elliott said.
"The Chinese currency…we consider will strengthen over time, and that will lead to a higher cost of production particularly for aluminium and for iron ore amongst the producers in China," he said.
"We think that that would put a floor under the prices of these two commodities on which, of course, we are very long." Elliott added.
