A slowing economy and mounting debt in Rio Tinto's largest market, China, aren't enough to shake the confidence of the company's top executive.
"If you ask me if I'm concerned about the general health of the Chinese economy in 2017, the answer is no," Jean-Sebastien Jacques said. "They will do whatever it takes to meet their targets."
Speaking on March 28 at the Financial Times Commodities Global Summit in Lausanne, Switzerland, Jacques said China is also taking steps to rationalize its steel industry, from restructuring state-owned enterprises to shutting down small, polluting blast furnaces and concentrating production in facilities with new blast furnaces that require higher grades of iron ore.
"I'm very confident they are restructuring their steelmaking capacity at this point in time," he said. "The other elephant in the room is aluminum — on this one, I would be very cautious about the pace of restructuring."
Jacques said Chinese government officials will have a difficult time dealing with workers displaced by shuttered smelters, especially in more rural areas of the country.
"The pace will be dependent on their ability to create jobs," he said.
Christopher Davis is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.