Rio Tinto's Albanese Says China Growth Will Recover (Update1)

 Rio Tinto Group Chief Executive Officer Tom Albanese said the deceleration of China's economic growth is temporary and the nation's industrialization will continue ``apace'' after monetary stimulus takes effect.

``The Chinese economy is taking a pause for breath,'' Albanese said today at a business lunch in Montreal. ``I'm confident China's rate of growth will recover.''

China's ``near-term'' slowdown is the result of the tightening of monetary policy, Albanese said. The Chinese government is now recognizing it has been successful in tackling inflation, he said, adding the effects of monetary stimulation ``will take six months to play out.''

``We expect Chinese industrialization and urbanization to continue apace,'' Albanese said.

Copper has plunged 38 percent this year on the London Metal Exchange, and aluminum dropped 12 percent at the same time that metals producers' energy and raw-material costs increased.

Demand and prices may get a ``quite significant bounce'' as China's economic growth steadies at 9 percent a year and high- cost producers curtail output, Vivek Tulpule, Rio Tinto's chief economist, said yesterday in an interview in Chicago.

Albanese, whose company is the target of a $63.1 billion takeover attempt by BHP Billiton Ltd., said the offer by the world's largest miner still ``significantly undervalues'' London- based Rio, even as commodity prices plummet.

``BHP needs Rio Tinto, while the reverse is not true,'' Albanese said.

Albanese said Rio's focus is on ``first-tier, low-cost, large-life operations,'' without giving specific targets.

Rio Tinto today announced plans to invest $228 million in a power-generation station in Saguenay, Quebec. The company last year bought Montreal-based Alcan Inc. for $38.1 billion to boost aluminum production.

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