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Commodities future still bright despite market, ex IMF boss says

The former chief of the International Money Fund says despite spiraling commodity prices, mining is still positive.

Speaking at Diggers and Dealers, former IMF head Rodrigo de Rato said while global uncertainty is damaging investment, continued demand for China and India will still drive the mining boom, the ABC reports.

His comments come after a Deloitte report that says WA resource companies' values have dropped by nearly a quarter over the last 12 months.

Earlier this year Ernst & Young released a report highlighting the uncertainties affecting the mining industry globally, and how these impacted investment.

In its report entitled Business risks facing mining and metals 2012-2013, global mining and metals leader for Ernest & Young, Mike Elliot, said "resource nationalism retains the number one risk ranking as governments seek to transfer even more value from the mining and metals sector".

De Rato added that demand is still supporting the industry.

"Global demand for commodities in general remains very positive and certainly China and emerging markets are the driving force for most of the commodities," he said.

"So in that respect, I think the prospect for commodities which is tied to China, is not as weak as market sentiment shows."

 

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