The head of Rio Tinto's iron ore business said demand from the resource-hungry China would continue to grow, despite weakness in the US economy.
"People need to understand what is fundamentally driving China's growth. The growth we are seeing in steel and hence iron ore is actually coming from urbanisation, from the 10-15 million people who are moving in from a rural environment to a city environment. They need houses, they need infrastructure, they need a whole lot of things that have to be there next year," Mr Walsh said.
"In iron ore, 90 per cent of the growth in the recent past has actually emanated from China. Our analysis shows that even if the US goes into recession -- and I'm not quite sure that it's quite there yet but it is certainly slowing -- it will only have an impact of 1 per cent on China's GDP."
China recorded 11.4 per cent GDP growth last year and while the Chinese government has forecast growth of 8 per cent this year, economists are expecting 10 per cent growth.
"Some analysts thought we had gone too far with our upgrades in 2004, but, three years on, China's demand is still getting stronger. If we could export more we could sell more," Mr Walsh said.
China's iron ore imports jumped to a record high of 38.2 million tonnes in February.
Speaking at a leadership conference in Perth yesterday, Mr Walsh also talked up India's potential as a strong trading partner for Australia.
"There are a lot of sceptics about India but it is heading towards the same point China reached in 2002-03," he said. "I certainly see strength in commitments to steel projects in India.
"With 50 per cent of the population younger than 25 and very dissatisfied with the standard of living, I consider it is only a matter of time before India really takes off."
He also noted there was potential for growth in Russia, Brazil, the Middle East and even Africa.
"All of these areas have the potential to take off in the same way that China has, so there is a pretty good future."
Mr Walsh told the conference the miner was well on track to achieve its planned production increases of 320 million tonnes by early next decade and 420 million tonnes by the middle of next decade.
Rio Tinto is sticking to its guns on plans to chase a 70 per cent price increase for its iron ore this year, which would take the benchmark price to about $US110 a tonne.
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