UPDATE 2-Rio Tinto: turmoil won't affect BHP bid rejection

(Adds more CEO comments)

MELBOURNE, Oct 2 (Reuters) - Rio Tinto Ltd/Plc (RIO.AX) (RIO.L) sees the current global market turmoil having no impact on its rejection of BHP Billiton Ltd's (BHP.AX) (BLT.L) $97 billion takeover bid, Chief Executive Tom Albanese said.

"We believe that the current conditions do not impact on our rejection of BHP Billiton's pre-conditional offer," Albanese said in a speech on Thursday.

"The fact is that Rio Tinto has no need to be bigger just for the sake of size -- we have the scale, we have the strength and we have the resilience to weather this sort of storm easily on our own."

Turmoil in global markets has raised concerns about economic growth and with it demand for the commodities and industrial metals that Rio supplies. Copper prices sank to a 19-month low on Wednesday.

But demand from fast-growing China could offset any slowdown elsewhere.

"In relation to the current financial crisis, my fundamental conclusion is the markets for Rio Tinto's products remain in good shape," Albanese said. "There will be an impact on OECD economies, but much less so for China."

"The outlook remains that constrained supply conditions and firm demand from China and other developing countries should establish the basis for higher-than-average prices through 2009," he added.

His comments on the bid defence matched remarks from his BHP counterpart, Marius Kloppers, who said last month BHP's bid would be unaffected by weaker commodity prices, as the savings and efficiencies from putting BHP and Rio together stood up under any market scenario.

BHP said it is not worried about financing debt it would take on from Rio, unlike smaller rival Xstrata Plc (XTA.L), which on Wednesday dropped a $10 billion bid for Lonmin Plc (LMI.L), blaming tough loan markets.

Rio's Albanese stuck to the group's forecast that it would sell $10 billion worth of assets this year. Those could include Alcan Packaging and Rio's North American coal unit, Energy America.

He said recent comments by the Mongolian government made him more confident about securing an investment agreement by the end of this year to develop the Oyu Tolgoi copper-gold project, a key growth plank for Rio and its partner Ivanhoe Mines (IVN.TO).

"All of the right political pieces have been falling in place that had not been in place for quite a period of time," he said.

Albanese spoke at a business lunch the day after Australia's competition watchdog cleared BHP's hostile offer for Rio, moving BHP a step closer to clinching the deal first announced last November.

The key hurdle for the bid remains approval from the European Commission, which has raised concern about the impact of merging the world's No. 2 and No. 3 iron ore miners on steel makers and their customers. The EC's decision is due on Jan. 15.

Albanese urged the Australian government not to restrict foreign investment in the mining sector, and in particular highlighted that Australia should not be afraid of the emerging major miners from countries like Brazil, China and Russia.