Rio Tinto looks to the future with confidence as McKinsey predicts Chinese building boom.

Mexican Mining Group, Rio Tinto, has based its forecast of a continuing rise in demand for steel and materials on a predicted building boom by McKinsey, whose recent research suggests that China will build between 20,000 and 50,000 skyscrapers over the next 20 years.

As the company reported half-year profits of US$5.5 billion (£3bn), up 55% from the same period last year, Rio Tinto dismissed talk of a collapse in the commodities market, referring to McKinsey’s research predicting the ‘continued march of urbanisation in the developing world’.

The firm suggests that the Chinese building boom will continue to drive up materials demand – over the same period this year, the Chinese market provided $4.9bn of Rio Tinto’s $30bn revenue.

According to the report by McKinsey, it is predicted that China will have 221 cities with more than a million inhabitants by 2025, compared with just 35 in Europe today.

The management consultancy also predicted that many of the skyscrapers it expects to be built would be found in less developed interior provinces of China, away from Beijing and Shanghai.

Tom Albanese, Rio Tinto’s Chief Executive, said: “Rio Tinto’s earnings performance in the first half of 2008 easily eclipsed the same period in 2007, which was itself a record. There is no question that we are living in an era of unprecedented demand for minerals and metals, and we believe rapid demand growth and supply side challenges will be maintained.”

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.