“In the near term, the Chinese economy is pausing for breath,” Albanese said. “China is not completely insulated from an OECD recession, and we will see an impact on Chinese exports. However, the near-term slowdown of growth is substantially due to tightening of monetary policy introduced by the Chinese government last year in order to tackle inflation. Furthermore, we expect third-quarter economic data to show an exaggerated slowdown, reflecting the postponement of projects during the Olympics. Looking further out, Chinese GDP will remain largely driven by the domestic economy, and we expect industrialization and urbanization to continue apace, with strengthening demand across a range of Rio Tinto products.”

Overall, Rio Tinto anticipates that economic growth in China will slip below 10% for 2008, down from nearly 12% in 2007. Any bounce in net demand for commodities will likely be delayed until sometime in 2009. At current metals prices, China’s metal producers are facing margin pressure, and it is likely that the vast majority of Chinese aluminum producers are now making operating losses, the Rio Tinto statement said.

However, over the longer term, Rio Tinto anticipates that Chinese investment will gain strength on the back of substantial domestic savings and a shift in government policy toward promoting growth objectives. In this context, the company said, it is worth noting that net trade contributes only about 6% to China’s GDP, while domestic investment contributes more than 40%.

As to Rio Tinto’s production results, the company reported a number of corporate quarterly production records. Iron ore production was at a record high and up 17% in comparison with the third quarter of 2007.

Bauxite, alumina and aluminum production at Rio Tinto Alcan were sharply higher, reflecting Rio Tinto’s acquisition of Alcan in the fourth quarter of 2007. On a pro forma basis the respective increases for bauxite and alumina were 11% and 2%, while aluminum production declined by 1%, primarily due to temporary cutbacks at Tiwai Point.

In copper, a strong recovery in ore grade at Kennecott Utah Copper was offset by lower production at Escondida, which experienced operational interruptions. Overall, Rio Tinto’s copper production was down 7% from the third quarter of 2007.

Rio Tinto’s Australian hard coking and thermal coal operations showed strength, with third-quarter 2008 production up by 40% and 8%, respectively, from thirdquarter 2007. In the United States, Rio Tinto’s coal production posted a 13% increase in comparison with third-quarter 2007. Company-wide uranium production was also up 13% year-on-year, and Rio Tinto’s industrial minerals business posted strong gains, with borates production up 24% and titanium dioxide feedstocks production up 11%.